The recent listing of Horizon Robotics (stock code: 9660.HK) on October 24 in Hong Kong marked a monumental moment for domestic intelligent driving companies, attracting significant attention from both domestic and international investorsThis event stands as the largest tech IPO in Hong Kong this year, and Horizon has secured cornerstone investors, including tech giants Alibaba and Baidu, leading to a staggering price increase of up to 38% on its debutFurthermore, renowned global investment firm BG committed over $500 million to the venture, indicating strong confidence from professional investors in the potential of Horizon Robotics.

The following day, WeRide, a tech company often dubbed as the “first global stock of universal autonomous driving” under the ticker "WRD," also made its debut on the NASDAQDespite its relatively brief history of only seven years, WeRide witnessed a dramatic surge in its stock price, prompting trading halts twice due to high volatility on its first day.

In addition to Horizon and WeRide, various other domestic intelligent driving enterprises such as Pony.ai, Momenta, Zongmu Technology, Youjia Innovation, and Xijing Technology are lined up for their IPOs, complementing other publicly listed companies like Black Sesame Smart Technology, Hesai Technology, and Sootoo TechnologyThe coming months may see over a dozen Chinese autonomous driving firms entering the market, marking a rapid evolution in this sector.

According to recent data from Qichacha, the number of existing intelligent driving-related enterprises in China reached 6,472 as of early October this yearOver the past decade, the registration rate has exhibited a fluctuating yet upward trajectory, with 263 new entities registered in the first half of this year, reflecting a year-on-year increase of 9.13%. The emergence of domestic intelligent driving enterprises resembles an avalanche, pushing the boundaries of innovation and investment.

The market heat is further fueled by favorable policies that propel intelligent driving advancements

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Although TuSimple—an autonomous trucking brand widely recognized as the first in the sector—returned its listing on NASDAQ earlier this year due to losses, it nevertheless highlights the momentum amongst various "first" domestic intelligent driving firms gearing up for their public offerings.

This year, the commercial potential of autonomous driving technologies has been vividly illustrated through various developmentsNews regarding Robotaxis has been frequent, highlighting controversies like the backlash against Baidu's Apollo Go in Wuhan, the full rollout of Google’s Waymo in San Francisco, and the long-awaited unveiling of Tesla’s Cybercab, projected to launch at a cost below $30,000 in 2026. These instances demonstrate the potential disruptions that autonomous driving technologies could unleash, igniting a frenzy of excitement in the capital markets.

The application of intelligent driving technologies is acceleratingFor ordinary car consumers, smart driving is no longer just the stuff of science fictionIncreasingly, new energy vehicles are utilizing cutting-edge intelligent driving technologiesIn prior articles discussing Horizon’s IPO, we highlighted that current passenger vehicle intelligent driving systems can be categorized into two tiers: Advanced Driver Assistance Systems (ADAS) and Higher-Level Autonomous Driving (AD). Technologies such as adaptive cruise control, lane-keeping assistance, and lane-change assistance are prevalent in L2 level vehicles, increasingly integrated into cars priced around 100,000 yuan—gaining acceptance among consumers.

The allure of higher-level driving features is steadily rising among buyersFor instance, the newly launched Xpeng Mona m03, although featuring modest interior space with a rear suspension that is not independent and priced around 150,000 yuan, successfully integrates advanced intelligent driving technology, resulting in overwhelming market responseReports indicate that the Xpeng Mona m03 has received over 80,000 orders since its launch, with more than half of Xpeng’s total sales for the month derived from this model in September, illustrating a successful market strategy of introducing advanced tech initially reserved for high-end models into the competitive mid-range segment.

Looking further back, BYD's Dream Day in January saw founder Wang Chuanfu proclaiming a bold vision: "The first half is electrification, the second half is intelligence." They subsequently launched models equipped with their self-developed "Tiangong" system, where L2 driving assistance capabilities have proliferated across models beyond the base configurations in BYD’s dominant market segments.

An essential player in the intelligent driving market is Huawei

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Its Wenjie series, powered by HarmonyOS, has emerged as one of the most successful homegrown high-end electric SUVs, particularly the Wenjie M9, which recorded over 160,000 pre-orders within the first ten months of its launchThis success is mirrored in the stock price of Seres, the manufacturer of Wenjie, experiencing a leap from approximately 8 yuan in 2020 to about 109 yuan today, showcasing Huawei's remarkable influence in transforming Seres into a formidable brand within the industry.

As a culmination of the intelligent driving revolution, relevant policies have also started to take shapeAn announcement from the Ministry of Industry and Information Technology highlighted the formation of a consortium, which includes nine automotive manufacturers and nine operational entitiesThis initiative will pilot intelligent and connected vehicle access and road usage trials in seven cities, including Beijing, Shanghai, and GuangzhouBy the end of August, over 16,000 autonomous vehicle test permits have been issued, alongside the opening of 32,000 kilometers of public test roads—an effort that supports the validation and iterative advancement of autonomous driving technologies.

Intelligent driving firms clearly stand at the convergence of transformative advancements within the automotive sectorHowever, the road to success may not be straightforward.

Despite the rapid progress in intelligent driving amid the new energy vehicle boom, it would be premature to declare victoryHistorically, autonomous driving initiative spearheaded by Google began in 2009, eventually evolving into Waymo, while Baidu, targeting Google’s lead, established its deep learning lab in 2013. This four-year gap is reflective of the two nations' divergent approaches to autonomous vehicle development.

From a technical standpoint, the most prominent methodologies can be categorized into several factionsThe hardware-focused approach represented by Waymo involves extensive self-investment in sensors, LiDAR, and computing platforms, a methodology known for its substantial upfront financial requirements

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In contrast, Tesla’s philosophy led by Elon Musk emphasizes software, where end-to-end solutions based on deep learning neural networks process inputs (e.g., images) to generate driving decisions, demonstrating an intriguing vision of autonomous driving—known as FSD (Full Self-Driving).

Currently, most domestic autonomous vehicle firms are adopting a pragmatic middle-ground strategyFor instance, Baidu's Apollo offers an Integrated Vehicle Infrastructure Cooperative System (IVICS) which utilizes advanced communication and Internet technologies to enable real-time interaction and collaboration among vehicles and infrastructure—ultimately striving to enhance traffic safety and efficiency within urban environments.

The diverging paths pursued by the United States and China largely stem from their respective leading industriesThe U.S. maintains a stronghold on semiconductor technology infrastructure, essential for high-end automotive chips, whilst China excels in infrastructure development, as demonstrated by initiatives such as extensive 5G rollouts and satellite internet, facilitating rapid advancements in vehicle-to-infrastructure collaboration.

Regardless of the anticipated trajectory of autonomous vehicle technology, the emphasis on "end-to-end models" is particularly salient for domestic new energy vehicle manufacturers.

End-to-end large models, where input data correlates directly with output control signals, possess the potential to significantly enhance intelligent driving capabilitiesTesla's FSD exemplifies successful deployment of such technology, making it desirable for many Chinese car manufacturersA search for “end-to-end large models” yields numerous domestic brands actively promoting their technological advancements in this realm—Huawei, Li Auto, Xpeng, Xiaomi, and more have all announced plans to base their city-level high-end intelligent driving functionalities on this approach, while Chery Auto’s autonomous driving subsidiary leader noted that adopting an end-to-end strategy is critical for their success.

However, leading with cutting-edge algorithms reveals the essence behind intelligent driving innovation: data management capabilities and computing power

Ultimately, the competitive landscape hinges on computational strengthWhile domestic manufacturers are diligently working to build their computing capacities to support autonomous vehicle model training, the previously mentioned technological hurdles pose substantial challengesThe U.S. holds an industrial advantage in computational resources, and recent tensions have restricted China’s access to critical technologies.

Aside from computing power, intelligent driving companies are similarly challenged by the need for profitabilityCurrent publicly listed domestic intelligent driving firms continue to experience financial losses, highlighting that while the prospects of intelligent driving may seem promising, insufficient funding could impede most enterprises from realizing this visionFor automakers, profitability remains essential; without it, advanced technology is futile.

As a result, domestic intelligent driving companies are eager to seize various “first” titles as they rush to go publicWhile bloodletting capital investment essential for the heavy initial costs of intelligent driving keeps companies afloat, building a sustainable foundation for profitability is critical.

In conclusion, as the intelligent driving sector burgeons in China, newfound players are emerging with vigor, fueled by the capital market's enthusiasmHowever, the pinnacle of technological achievement will not materialize without confronting the inherent risks and challengesFrom computational rivalries to the survival struggle for profits, the road ahead for domestic intelligent driving firms is fraught with uncertaintyOnly through persistent innovation and adaptability can these enterprises genuinely control their futuresLooking forward, domestic intelligent driving companies must navigate changing market demands with resolute strides, fostering technological advancement to journey further along this promising road, ultimately aspiring to lead the industry.

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