As the year draws to a close, China's auto industry has seen another year of intense competition! The Guangzhou Auto Show is the last large-scale A-class auto show in China each year. So, what trends will the 2024 Guangzhou Auto Show reveal about China's auto industry in 2025?

Abstract:

General - The Oil-Electric Battle Unveils New Species.

Joint Venture Automakers - Chinese Technology Feeds Back to Strengthen Joint Venture Brands.

Brand Products - Domestic High-End Luxury, Foreign Brands Start to Absent.

Intelligent Driving - High-Level Intelligent Driving Accelerates Popularization in the 150,000-Yuan Range.

Smart Cockpit - Continuously Mobile Internet and Home Appliance-Like.

Energy Drive - Plug-in Hybrid Electric Vehicles (PHEVs) are Booming.

Chassis - Digitized and AI-Enabled.

General - The Oil-Electric Battle Unveils New Species

According to official data from the Guangzhou Auto Show, 1,171 new vehicles were exhibited at this Guangzhou International Auto Show, with new energy vehicles and fuel vehicles accounting for half each. Over the past few years, the penetration rate of new energy vehicles has been increasing repeatedly. According to the latest data from the China Passenger Car Association, the retail penetration rate of new energy vehicles in China reached 52.9% in October 2024.

Based on the new vehicles at this auto show, it can be inferred that for a considerable period, oil vehicles and electric vehicles will coexist, and the plug-in hybrid vehicles that can run on both oil and electricity will be favored by both policies and users.

Similar to recent auto shows like the Beijing Auto Show, domestic brands continue to vigorously pursue electrification and intelligence at the Guangzhou Auto Show. Traditional interior and exterior trims have been fully transformed into home appliances, and traditional mechanical chassis have been pushed towards intelligent chassis.

Foreign brands do not have as many intelligent gimmicks as domestic brands, so they do not have many highlights to attract visitors. However, a trend is that joint venture brands are starting to adopt domestic electrification and intelligent supply chains and technologies.

Overall, the exterior trims, chassis drives, and electronics of the automotive industry have all been revolutionized. The only way for the automotive industry to break through is to evolve into a Transformer.

New species such as flying cars and humanoid robots have already begun to emerge.

During the Guangzhou Auto Show:

Changan Automobile officially announced its future plans: "Changan will not only build robots but also flying cars and deploy land, sea, and air transportation solutions." They also stated that they will invest over 50 billion yuan within five years, launch Changan flying cars by 2026, and release humanoid robots by 2027.

XPeng Motors launched its "Land Aircraft Carrier" - a split-body flying car. This flying car is planned to achieve mass production and delivery by 2026 and will open for pre-orders in December 2024.

So far, many automakers such as BYD, Toyota, Changan Automobile, BAIC Group, SAIC Motor, and XPeng Motors have extended their business reach into the field of humanoid robots through investment or independent research and development. Humanoid robots have entered various automaker factories for "practical training."

Joint Venture Automakers - Chinese Technology Feeds Back to Strengthen Joint Venture Brands

No one can deny the contributions of joint venture brands to China's auto industry. Over the past 40 years, foreign auto brands have laid the foundation for China's auto manufacturing and talent system, and localization has cultivated China's auto manufacturing and supply chain capabilities. These have laid the groundwork for the electrification and intelligence of China's auto industry. Of course, foreign investors have also profited handsomely from the Chinese market and lacked the motivation for change.

When China's auto industry underwent rapid changes, foreign investors faced challenges, which is also evident in the current situation of the automotive industry in Europe, the United States, and Japan.

At this auto show, more joint venture brands using Chinese technology and supply chains can be seen:

SAIC Audi uses SAIC's local Advanced Digitized Platform intelligent digital platform.

Nissan N7 adopts Dongfeng Nissan's locally developed central integration + regional control SOA vehicle intelligent electronic and electrical architecture to achieve platform compatibility evolution and provide multiple power paths.

Honda's Ye P7 is based on its pure electric "W" architecture, developed locally by its Chinese team. The electronic and electrical series suppliers are local companies such as Huawei, CATL, Hangsheng Technology, and iFLYTEK.

The above are joint venture brands that adopted local architectures at this Guangzhou Auto Show. Of course, they should integrate physical and electronic and electrical architectures. Physical architectures have now become simple integrated management of manufacturing and supply chains. Electronic and electrical architectures are what joint ventures lack. Foreign parties are stubborn about products and technologies, but when sales plummet, no one is stubborn anymore.

Therefore, it can be seen that Volkswagen will soon adopt XPeng's electronic and electrical architecture, and Buick will also adopt the local CLEA architecture for all models except the GL8. In addition, in terms of hybrids, joint ventures have already localized hybrid technologies in China rather than relying on foreign parent companies, such as Ford and GM's hybrids in China.

In 2025, more joint venture brands will enter the market using domestic technologies.

Brand Products - Domestic High-End Luxury, Foreign Brands Start to Absent

Led by BYD, Chinese mass-market brands have made significant inroads into the mass-market segment. As discussed in our previous article, "Understanding How BYD Defines Luxury Cars from the Tenzhi Z9GT," Chinese brands are leveraging intelligence to capture the fortress of luxury and high-end models. Therefore, many Chinese luxury cars priced over a million yuan can be seen at this Guangzhou Auto Show:

BYD's Yangwang brand brought the U7 and U9 to this Guangzhou Auto Show. The Yangwang U7 is positioned as a million-yuan luxury D-segment vehicle, and the Yangwang U9 is also a high-performance model that cannot be underestimated.

Huawei HarmonyOS and JAC Motors collaborated to create the Zunjie brand, named "Zun," which is currently Huawei's most premium smart car selection, with an expected price exceeding 1 million yuan. It directly competes with ultra-luxury brands such as Maybach and Rolls-Royce.

In addition, JY Auto is also expected to bring its first high-end supercar model, Hongqi's million-yuan Golden Sunflower, Xiaomi SU7 ULTRA, etc.

Furthermore, many brands are setting the tone for next year: regardless of how fierce the current auto market is, the determination to "upgrade the brand" will remain firm, which has become an important direction for the development of China's auto industry. After all, it is too competitive now, and only by upgrading the brand can additional value be created.

From a market trend perspective, the consumption upgrade trend in the domestic passenger car market is evident. Leveraging the opportunities of electrification and intelligence, independent brands are gradually breaking the monopoly of foreign brands and rapidly occupying the high-end market share.

Data shows that the market space for vehicles priced above 200,000 yuan is continuously expanding. For example, in the ZEEKR brand, the share of independent brands in the 400,000-600,000 yuan and million-yuan luxury car markets is also continuously increasing.

Among traditional foreign luxury car brands, Jaguar Land Rover was absent from the Guangzhou Auto Show for the first time in recent years, and Genesis, Polestar, and Rolls-Royce were also absent, perhaps indicating that they are feeling the chill and are adjusting or rethinking their strategies.

Intelligent Driving - High-Level Intelligent Driving Accelerates Popularization in the 150,000-Yuan Range

The Pearl River Delta, where the Guangzhou Auto Show is located, can be considered a pioneer in popularizing high-level intelligent driving, with companies like XPeng, GAC, and BYD leading the way.

The XPeng P7+ unveiled at this Guangzhou Auto Show is a milestone product for XPeng's intelligent driving "equality." This year, XPeng Motors took the lead in launching the battle for intelligent driving "equality" among emerging auto companies, lowering the entry price of intelligent driving into the red ocean market of the 100,000-150,000 yuan range.

GAC Toyota will also fully showcase the latest achievements of its intelligent and electric transformation and release the all-new intelligent pure electric SUV Botzhi 3X under its Botzhi brand. Priced around 150,000 yuan, it claims to be the most cost-effective high-level intelligent driving vehicle in this price range, taking the lead among joint venture brands in equipping L2++ end-to-end high-level intelligent driving.

GAC Aion released the all-new A0-class pure electric hatchback Aion UT. The car's biggest highlight is that, despite being an entry-level low-priced vehicle, it will be equipped with the brand's latest high-level intelligent driving technology.

BYD, the "leader" of new energy vehicles that will unveil multiple new models at the auto show, has also taken practical actions to "follow suit." It is reported that following the collaboration between FANGCHENGBAO and Huawei, Horizon Robotics' Journey 6 has obtained a platform-based order from BYD, and mid-to-high-level intelligent driving functions will be implemented on multiple BYD models in 2025.

Therefore, this Guangzhou Auto Show confirms the situation of low-cost popularization of intelligent driving.

In addition, even the once arrogant German luxury cars have started to cooperate with Huawei. The Audi A5L unveiled at this auto show will be the first Audi with four rings to use Huawei's intelligent driving technology. Foreign brands such as Mercedes-Benz and Volkswagen that adopt China's intelligent driving solutions will enter the Chinese market around 2025.

Smart Cockpit - Continuously Mobile Internet and Home Appliance-Like

In terms of hardware, the smart cockpit is fully leaning towards Qualcomm's platform, which is heavily influenced by mobile internet. In terms of application ecology, interaction methods are fully tablet-like, supported by operating systems such as Android and HarmonyOS. Internet apps with content such as language and video are fully integrated into vehicles.

Smart voice assistants are standard, connected to the entire vehicle control system, with AI GPT-like voice empowerment.

Familiar elements from the home improvement industry, such as interior and exterior lighting, interior soft furnishings, seats and sofas, audio systems, and large TVs, are all trending towards more luxurious and technologically advanced designs in automobiles. Among them, seats are represented by zero-gravity seats with an opening and closing angle exceeding 120 degrees, and lighting is represented by external high-brightness LED matrices or pixel-based LEDs, which is quite a trend.

Energy Drive - Plug-in Hybrid Electric Vehicles (PHEVs) are Booming

At this Guangzhou Auto Show, new forces with plug-in hybrid technology can rest assured.

Relying on its controversial plug-in hybrid technology, Li Auto has achieved great success, becoming the new force with the highest gross margin and the first to turn a profit. NIO, which is well-versed in cost advantages, quickly understood the trend and directly copied Li Auto's approach, now ranking among the top in new energy vehicle sales. With Huawei's support, AITO not only added intelligence to its plug-in hybrid models but also competed with Li Auto and increased its brand pricing.

Who can blame plug-in hybrid models when they cost 20,000 yuan less than pure electric vehicles on the same platform? For the price of plug-in hybrids, please refer to our previous article, "A Chart to Understand the Costs of Fuel Vehicles, Pure Electric Vehicles, and Plug-in Hybrid Vehicles," for more information.

Now, even companies that only produce pure electric vehicles are starting to waver.

AITO unveiled its Kunlun range extension technology, XPeng officially announced its Kunpeng Super Range Extension Technology, and GAC Aion, NIO, ZEEKR, and IM Motors have officially announced that they will launch new oil-and-electricity-capable vehicles as early as 2025.

In the blink of an eye, brands that insist on pure electric vehicles have become a minority in the auto market.

Chassis - Digitized and AI-Enabled

The automotive chassis has traditionally been a mechanical and hydraulic system, but now electrification is also electrifying the chassis, gradually eliminating the familiar hydraulic system and moving towards closed-loop sensing, processing, and execution to achieve digitization.

Exhibited at this Guangzhou Auto Show:

Geely's AI Digital Chassis Hiatus can perform functions such as active greeting, agile exit, active suspension "dancing," and tank turn, among others, by integrating the vehicle's X/Y/Z attitudes.

SAIC IM Motors' "Lingxi Digital Chassis" equips the vehicle with a "super cerebellum" for the first time through the coordinated management of the entire vehicle's three-axis and six-degree-of-freedom motion, realizing the joint adjustment and control of dynamic performance in all dimensions.

GAC Aion's "Air Suspension" intelligent digital chassis, supported by powerful hardware and intelligent software, can achieve "in-situ drifting" steering.

Hongqi's fully active suspension and four-wheel-by-wire steering, paired with an AI digital chassis, can achieve more extreme vehicle control capabilities, effectively optimizing the vehicle's anti-roll, anti-pitch, and vibration filtering capabilities. It can also adaptively adjust based on the user's driving habits, creating a unique driving experience for each individual.

Yangwang U7's fully digital chassis adopts innovations in transitioning from centralized to distributed power and from mechanical to electrical signal transmission. BYD's self-developed underlying control software fully integrates and controls the two major technologies: Easy Drive and Cloud Ride-Z. By sensing information through sensors, making decisions in the intelligent computing center, and executing commands through motors, it realizes fully digital adjustment of the vehicle's three-dimensional and six-degree-of-freedom attitude, effectively shortening the perception-decision-execution path and achieving full digital control.

In summary, the electrification of the chassis enables faster response times and closed-loop sensing, processing, and execution of chassis components.

Digitizing the chassis allows for AI integration, supporting remote software changes and OTA upgrades. By upgrading the actuator voltage, such as to 48V, the chassis power can be increased, enabling more functional control, such as the chassis that can shake leaves (a reference to a viral video of a Tesla shaking leaves off its windshield) or dance (a reference to a viral video of a BYD Han EV "dancing" on its own).

A digitized chassis will usher the automotive industry into a new era.

Others - Solid-State Batteries are the Next Breakthrough. At the 2024 Guangzhou Auto Show, Chery brought a new model, the Chery Liefeng, equipped with solid-state battery technology for the first time! GAC Group announced that solid-state battery technology will be installed in vehicles as planned by 2026! 800V has already become widespread in 2024, alleviating fast-charging anxiety. The drive system and energy electrification have reached their conclusions.

China's auto industry will continue to compete fiercely in 2025.

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