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 Chinese market. The latest salvo came after Li Auto unveiled the Mach M100, a 5-nanometer 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). It achieved a highly efficient 82% utilization rate, Li Auto added. The announcement followed a string of breakthroughs by its rivals. Weeks earlier, world-leading EV maker BYD debuted its Xuanji A3, a 4 nm smart-driving chip now in mass production. Capable of supporting Level 3 and Level 4 autonomous-driving, a trio of Xuanji A3 chips working in tandem can deliver more than 2,100 TOPS of processing power. 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 5 nm 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 local challenger Horizon Robotics. This push for self-reliance has been accelerated by the massive democratization of smart-driving technology across China. Features that were once the exclusive domain of luxury models have reached 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% 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% in 2025 from 21.6% a year earlier.
This change has been especially abrupt in cheaper vehicles. In the segment below CNY200,000, which Horizon said accounted for 65% of China’s passenger-car sales, the penetration rate of mid- to high-level driver-assistance systems rose to more than 50% by the end of 2025 from 5% 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 CNY12,000, effectively bringing the entry price of a BYD model with urban NOA to CNY78,800. The bank said the package saw a take-up rate of more than 60% 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% and 65%, respectively, in 2025, the South China Morning Post reports.
