Smart Driving Equality: A Battle For Control Of An Emerging Industry

As smart driving features trickle down to budget cars, the balance of power is shifting to automakers and away from their technology suppliers

China's autonomous driving industry is undergoing a major power shift. As "smart driving equality" emerges as the dominant narrative, a quiet revolution is underway — transitioning the industry from one limited to luxury cars to one with mainstream capabilities across the entire automotive sector.

Major Chinese automakers like BYD (1211.HK; 002594.SZ), NIO (NIO.US; 9866.HK), XPeng (XPEV.US; 9868.HK) and AITO are no longer confining their advanced autonomous driving functions to flagship models. To the contrary, features like navigation on autopilot (NOA), automated parking and city pilot are being rapidly rolled out across mid- and lower-end models priced below 200,000 yuan ($27,400).

While not the first to do so, BYD's launch of its high-level DiPilot system on models costing below 100,000 yuan at the beginning of this year marked a turning point—confirming that the era of smart driving equality had truly arrived.

"In the automotive sector, we believe that full-scale intelligentization will strengthen the global leadership of Chinese brands," said BYD founder Wang Chuanfu. "This is a show of confidence from China's auto industry, and reflects the confidence of Chinese technology."

Historically, high-level autonomous driving was a high-margin business, relying on premium hardware like LiDAR, HD cameras, domain controllers, and powerful chips — typically reserved for luxury models. But as smart driving becomes more accessible, automakers are increasingly taking control of core technologies to protect their profit margins.

BYD's DiPilot, XPeng's XNGP, Li Auto's (LI.US; 2015.HK) AD Max, and Huawei's ADS 2.0 illustrate this shift. Automakers are building their own algorithm teams, mapping systems, and even managing data annotation and simulation training in-house. As a result, upstream suppliers are being pushed to the sidelines, downgraded from solution providers to low-margin parts vendors.

Suppliers like RoboSense (2498.HK) are now offering low-cost solid-state LiDAR and modular solutions. Hesai (HSAI.US) is co-developing customized sensors with automakers.

For suppliers, this is a fight for survival. Without core technologies or the ability to scale, many small and mid-sized vendors face an uphill battle, and are surviving only with razor-thin margins. Only those with system integration, algorithm coordination, and global delivery capabilities are likely to endure.

Behind the push to make advanced autonomous driving available to all lies a quiet industry reshuffling and a redistribution of power. The real winners will be those companies that can not only manufacture vehicles but also master the soul of intelligent driving.