GF SEC: AI Empowers Smart Driving, the Turning Point of Advanced Intelligent Driving Experience May Have Arrived

GF SEC released a research report stating that as electric vehicle penetration continues to deepen, intelligentization is expected to bring about a new wave of disruptive change. It is becoming increasingly important to track and assess the capabilities and potential of various intelligent driving technologies to identify the winners in the overall vehicle market. With the rapid iteration and empowerment of AI technology, the inflection point for advanced intelligent driving experiences may have already arrived, and Chinese brand car companies are expected to continue to achieve breakthrough development under intelligentization. Based on this single variable, it is recommended to focus on complete vehicles, components, and technical services in the passenger car industry. GF SEC's key points are as follows: Is the technology solution converging or diverging? In previous research, the firm has been considering whether the technological path is solidifying and the resulting changes in the industry landscape. With the development of AI and the rapid increase in computing power, the upper limit of end-to-end solutions has significantly increased, and the choice of paths may begin to converge. Future competition in intelligent driving may mainly focus on algorithm superiority, closed-loop data capabilities, and cloud computing resources. Over the long term, talent mobility may lead to convergence of algorithm capabilities, but in the short term, algorithm capabilities and iteration speed remain the main source of differentiation in intelligent driving experiences for car companies. Algorithms are likely to remain an important variable to track in the next 1-2 years, so the report's second part focuses on the iteration path of algorithms and current strategies of car companies; with a key focus on the transition of intelligent driving algorithm paths and the current progress of car companies in algorithms. How to evaluate differences in intelligent driving levels in a relatively objective manner? The inflection point of intelligent driving experiences will be the moment when consumers view intelligent driving as a core focus for car purchase and are willing to pay significantly more. This marks a shift from technology-driven to market-driven; reaching this inflection point, car companies are expected to gain excess sales, profit growth, and market valuation premiums through leading intelligent driving technology. Therefore, tracking intelligent driving experiences and identifying inflection points are particularly important. After practical exploration, the firm believes that allowing consumers to evaluate based on their willingness to pay is the best choice. By tracking consumers' dynamic payment and usage willingness to objectively measure car companies' intelligent driving experiences, it may provide a more objective perspective for investment decisions. How to track intelligent driving experiences? 1. Willingness to pay: The payment rate is a core indicator of measuring technology maturity and market acceptance. Taking Hongmeng Intelligent Drive (Huawei)/Xiaopeng/Ideamake as samples, according to compulsory insurance, the sales proportion of intelligent driving versions of Hongmeng/Ideamake/Xiaopeng models is 85%/46%/40%; among consumer-selectable models, the sales proportion of intelligent driving versions is 55%/45%/54%. By analyzing this within the "Guangfa Auto corresponding competitive combination," it can be seen that the market share of intelligent driving models has significantly increased in the past 24 years, showing a better competitive performance compared to the overall performance of car companies. 2. Usage willingness: Usage rate (number of intelligent driving kilometers per hundred kilometers driven per vehicle) is an intuitive indicator of usability and acceptance. According to calculations, the usage rate of intelligent driving continues to increase over time: in 24Q4, Tesla's North America FSD usage rate was 31.1%; in 24Q4, the full-scene/city/highway usage rates of Hongmeng Intelligent Drive were 29.1%/21.1%/41.8%; as of mid-February 25, the full-scene usage rate of Ideamake cars was 22.6%, and as of the end of November 24, the city/highway usage rates were 6.1%/16.2%. Risk Warning: Insufficient increase in the penetration rate of intelligent driving, unexpected policy progress, etc.