Chinese EV makers pivot from price wars to AI for autonomous driving

According to Morgan Stanley, Chinese electric vehicle manufacturers are transitioning their emphasis from competing on price to focusing on artificial intelligence, especially in autonomous driving technology. Tim Hsiao, who leads the Greater China auto and shared mobility research team, mentioned that automakers are reallocating resources to enhance their autonomous driving features, aiming for growth that extends beyond sales driven by subsidies. This initiative is anticipated to introduce Level 3 (L3) conditionally autonomous driving models, moving up from the existing L2 or L2+ systems. The largest EV manufacturer has committed over 100 billion yuan (US$14.8 billion) for research and development to achieve "zero traffic accidents" through autonomous driving. Hsiao emphasized that merely launching new EVs will not set manufacturers apart; they need to enhance their AI capabilities for driving and in-car experiences, as AI is viewed as the sole technology with scalable investment potential.