In the realm of new energy vehicle companies, beyond the futuristic vision of flying cars, AI seems to be the current buzzword. Recently, yet another player has announced its intent to focus on AI. How should we perceive this clustering of automotive newcomers around AI technology? Can AI truly serve as a panacea for these emerging forces?

I. Another Auto Newcomer Embraces AI

According to Jiemian News, XPeng Motors has reaffirmed its ambition to become an AI-centric company. In an internal letter marking the start of 2025, He Xiaopeng, Chairman and CEO of XPeng Motors, stated that the next decade will belong to AI, with a wave of development larger and longer-lasting than the mobile internet era. He emphasized that no one can defy this trend, and early adopters of AI will have a significant advantage. "XPeng aims to become a globally leading AI car company."

Over the past year, XPeng has invested 3.5 billion yuan in AI R&D, with a focus on intelligent driving. This has led to the launch of a nationwide autonomous driving system and continuous upgrades to the vehicle's smart ecosystem. In April 2022, XPeng embarked on "end-to-end" AI R&D, unveiling its "end-to-end" intelligent driving solution this May. He Xiaopeng noted in the internal letter that with a decade-long commitment to AI technology, XPeng is now translating its technological prowess into product and cost advantages, further enhancing its competitive edge.

The internal letter also detailed XPeng's progress in product technology, marketing, organizational management, workflow, and other aspects in 2024. The company has surpassed its gross margin target by 20 percentage points and established a systematic and scalable capability from product definition to delivery.

He Xiaopeng anticipates intensified competition in the automotive market in 2025, with a price war expected to commence in January. XPeng plans to introduce multiple new models equipped with its AI system technology throughout the year, with major new products and facelifts expected almost every quarter.

Coincidentally, Li Xiang, Chairman and CEO of Lixiang One, who had been out of the public eye for nine months, declared upon his return that "AI means everything to Lixiang." Li Xiang believes that AI will become the core entry point for all devices, services, applications, and transactions, akin to a battle that Apple cannot afford to lose. This judgment has become a turning point for Lixiang's future. Internally, Li Xiang has even warned his executives, "If we don't embrace artificial intelligence, we will be obsolete."

Li Xiang contends that a truly revolutionary product must be capable of autonomously utilizing all devices and services. This, he asserts, is the essence of true AI. In his vision, a genuine AI super app must autonomously control all devices and offer a comprehensive range of services. The "Lixiang Assistant" will not be confined to vehicles but will also extend to mobile phones, computers, and even smart glasses.

Lixiang has not only invested heavily in intelligent driving but has also made comprehensive layouts in base models, end-to-end systems, and visual language models (VLM). He mentioned that Lixiang's R&D investment exceeds 10 billion yuan, with nearly half allocated to AI. Li Xiang believes that the advent of large models will usher in fundamental changes for humanity.

II. Can AI Be the Salvation for New Auto Forces?

With the rapid advancement of technology, many new automotive players are vigorously pursuing AI, aiming to gain a foothold in the industry's transformation through technological innovation and application. But can AI truly serve as a panacea for these emerging forces? How should we approach this question?

First, AI is revolutionizing the automotive industry. In today's landscape, smart cars powered by AI are transforming the industry at an unprecedented pace. The rapid development of autonomous driving technology is a pivotal factor. As technology progresses, autonomous driving is transitioning from a theoretical concept to a tangible reality, advancing towards higher levels of automation. From initial driver assistance features like adaptive cruise control and lane keeping to current capabilities enabling highly autonomous driving in specific scenarios, the industry is steadily progressing towards fully reliable driverless technology. With advancements in sensor technology, algorithm optimization, and computing power, the safety and reliability of autonomous driving continue to improve.

The impact of this transformation cannot be overstated, as it has the potential to completely upend traditional car usage patterns and market structures. Take Luobo Kuaipao as an example; it has achieved large-scale commercial use, bringing significant changes to the transportation market in its test cities. Faced with this monumental wave of transformation, new automotive players understand that only by entering the market early and investing heavily in autonomous driving R&D can they secure a place in future competition and share in the spoils. Hesitation at this juncture could make it extremely difficult to penetrate the market once technology matures and market structures solidify.

Moreover, smart cabins have become a standard feature in new auto models, with AI serving as the soul behind this standard. Smart cabins aim to provide drivers and passengers with a comprehensive and personalized comfort experience. Leveraging AI technology, vehicles can accurately perceive the state of occupants and automatically adjust environmental parameters such as seats, temperature, and humidity. They can intelligently recommend music and navigation routes based on driver preferences and habits, and even perform complex operations like controlling windows and querying information through voice interaction, enhancing driving safety and convenience. New players have keenly identified this key aspect, prioritizing AI in smart cabin R&D to create differentiated competitive advantages and attract more consumer favor.

Second, AI offers a competitive edge to new auto forces amidst the red ocean. The new energy vehicle market has witnessed explosive growth in recent years, attracting an influx of companies and intensifying market competition. In this saturated market, consumers are spoilt for choice, with various brands, models, driving ranges, and price points available.

In this context, only companies with genuine core competitiveness can navigate the fiercely competitive market. Traditional competitive strategies, such as price wars, may attract consumers in the short term but can compress corporate profit margins in the long run, making it difficult to establish sustainable competitive advantages.

In contrast, technological innovation, particularly in AI, presents a breakthrough opportunity for new players. The application of AI technology in automobiles can offer numerous unique selling points. For instance, AI-driven intelligent interaction systems can enable cross-scenario, multi-modal human-vehicle communication, creating an exclusive and immersive in-vehicle intelligent ecosystem that turns every journey into a pleasurable experience. These AI-based unique selling points not only help new players attract consumers in the terminal market and enhance brand loyalty but also support premium pricing strategies, enabling them to escape the quagmire of low-price competition, generate substantial profit margins for enterprises, and ensure continuous R&D investment, fostering a virtuous development cycle.

Third, the AI layout of new auto forces extends beyond vehicles. As Li Xiang mentioned, Lixiang's ambition with AI is not confined to automobiles. Lixiang's AI can be applied to various intelligent scenarios beyond in-vehicle systems, highlighting a crucial reason for new auto enterprises to deploy AI—generating profits beyond the automotive sector.

Taking the in-vehicle system as an example, with the continuous development of AI technology, the in-vehicle system can evolve into an intelligent mobile terminal. Besides offering intelligent services to drivers and passengers within the vehicle, it can also connect with external intelligent devices and smart homes. For instance, while in the car, users can control smart devices at home through the in-vehicle system, such as turning on the air conditioner in advance or checking home cameras. This cross-scenario application broadens the scope of AI application and opens up new business opportunities for new auto enterprises.

For new auto enterprises, extending AI technology developed for automobiles to other intelligent scenarios can achieve technology reuse, reduce R&D costs, explore new markets, and diversify corporate revenue streams. This strategic consideration is pivotal for new auto enterprises deploying AI.

Fourth, while AI offers immense potential, it also entails significant risks. While focusing on AI presents many alluring prospects for new auto players, it's crucial to acknowledge that behind the rapid development of AI technologies like large models lie high risks that accompany high investments. These risks are akin to the sword of Damocles hanging over new auto enterprises and cannot be ignored.

AI R&D, particularly in cutting-edge areas like autonomous driving and smart cabin large model training, can be a bottomless pit for fund consumption. From the high salaries of R&D talents to the collection, annotation, and storage of massive data, to the leasing and maintenance of supercomputing power, every step requires a continuous infusion of substantial funds. According to incomplete statistics, for a new auto enterprise to establish an industry-competitive AI R&D system, the annual investment could amount to hundreds of millions or even billions of yuan, posing a significant financial burden for enterprises that have yet to achieve stable profitability and have relatively fragile capital chains. If subsequent funding falls short of expectations and hinders the R&D process, early investments may go to waste, potentially plunging the enterprise into a life-or-death crisis.

In the market, while the application prospects of AI in automobiles are vast, there is still uncertainty regarding consumer acceptance and willingness to pay for AI features. Some consumers may be cautious about new technologies and concerned about their safety and reliability. Additionally, market competition is fierce. Besides rivalry among new auto enterprises, traditional automakers are actively deploying AI technology, and technology giants may also enter the automotive AI market. This complex market environment increases uncertainty for new auto enterprises focusing on AI.

Thus, the widespread adoption of AI by new auto players is an inevitable move to align with the trend of intelligent transformation in the automotive industry. However, balancing the relationship between opportunities and risks will be a critical challenge for all participants. Finding a new model to effectively address this issue will also test every new auto enterprise.