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Howard Liu

A new front has opened in China’s electric-vehicle tech war as carmakers design their own smart-driving chips, turning custom silicon into the industry’s weapon of choice in the world’s largest auto market.
The latest salvo came on Monday after Li Auto unveiled the Mach M100, a 5-nanometre artificial-intelligence chip tailored for autonomous driving.
Designed for the carmaker’s new L9 Livis SUV model, the chip displayed single-unit computing power of 1,280 trillion operations per second (TOPS) – a metric of how fast an AI brain can process incoming data, Li Auto said. It achieved a highly efficient 82 per cent utilisation rate, the firm added.
The announcement followed a string of breakthroughs by its rivals.
Weeks earlier, world-leading EV maker BYD debuted its Xuanji A3, a 4nm smart-driving chip now in mass production. Capable of supporting Level 3 and Level 4 autonomous-driving functions, a trio of Xuanji A3 chips working in tandem can deliver more than 2,100 TOPS of processing power, the company said.
Higher TOPS allow a vehicle’s computers to make split-second driving decisions by simultaneously crunching feeds from various sources such as radar and lidar sensors.
Meanwhile, Nio has introduced its own 5nm NX9031 chip and Xpeng is developing its proprietary Turing chip for next-generation intelligent-driving systems.
By designing their own chips, Chinese carmakers are trying to gain more control over the computing hardware behind advanced driver-assistance systems, while reducing reliance on Nvidia and Horizon Robotics, a Hong Kong-listed Chinese automotive chip and software company seen as one of Nvidia’s key local challengers.
This push for self-reliance has been accelerated by the massive democratisation of smart-driving technology across China. Features that were once the exclusive domain of luxury models have cascaded into the mass market, triggering a need for cheaper, more efficient computing hardware.
The penetration rate of passenger cars equipped with intelligent driver-assistance functions reached 67.6 per cent in 2025, according to Horizon Robotics’ annual report. The share of new smart vehicles equipped with mid- to high-level systems, including highway and urban navigate on autopilot (NOA) systems, almost doubled to 42.6 per cent in 2025 from 21.6 per cent a year earlier.
This change has been especially abrupt in cheaper vehicles. In the segment below 200,000 yuan (US$29,545), which Horizon said accounted for 65 per cent of China’s passenger-car sales, the penetration rate of mid- to high-level driver-assistance systems rose to more than 50 per cent by the end of 2025 from 5 per cent at the start of the year.
That mass-market shift is putting pressure on carmakers to lower the cost of intelligent-driving hardware. Goldman Sachs analysts said BYD’s God’s Eye B system, which features urban NOA, was now available as an option across all models for 12,000 yuan, effectively bringing the entry price of a BYD model with urban NOA to 78,800 yuan. The bank said the package saw a take-up rate of more than 60 per cent on the Seagull and other models.
Goldman analysts said BYD’s latest smart-driving push could “potentially lower component cost and improve profit levels”, noting that Nvidia and Horizon Robotics had gross margins of 75 per cent and 65 per cent, respectively, in 2025.
For carmakers, self-designed chips offer several potential advantages: lower long-term component costs, tighter integration between hardware and software, and greater control over product road maps.
Analysts at Huatai Securities said that BYD’s Xuanji A3 could help improve the upper limit of the carmaker’s smart-driving capabilities while lowering vehicle costs, citing Nio’s in-house chip as an example of a move that saw a direct reduction in per-vehicle costs of 10,000 yuan.


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Carmakers strive for more control over computing hardware to reduce reliance on Nvidia and Horizon Robotics


Carmakers strive for more control over computing hardware to reduce reliance on Nvidia and Horizon Robotics.


Smart-driving chips: the weapon of choice in China’s EV tech war

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Carmakers strive for more control over computing hardware to reduce reliance on Nvidia and Horizon Robotics

Carmakers strive for more control over computing hardware to reduce reliance on Nvidia and Horizon Robotics