CITIC SEC has released a research report stating that the trend towards democratizing smart driving continues to evolve. It estimates that the penetration rates of urban/highway Navigate on Autopilot (NOA) in the domestic passenger vehicle market will reach 14%/15% respectively in 2025, and are expected to further increase to 23%/16% in 2026. This will drive high growth in shipments of products such as high-to-medium computing power smart driving chips, LiDAR, and smart driving domain controllers.
Regarding L4 autonomous driving, several companies have already demonstrated economic benefits in benchmark projects, accelerating commercialization. Under these trends, various segments of the industry chain are expected to further advance technology R&D and product deployment, with the automotive intelligence industry chain poised to benefit. The report suggests focusing on the following investment themes: 1) leading smart driving component suppliers; 2) leading Robotaxi companies; 3) automakers with advanced smart driving R&D progress.
LiDAR: Rapid Increase in Shipments, Leading Companies Gradually Achieving Profitability
According to Gasgoo data, LiDAR industry shipments are projected to reach 3.386 million units in 2025, a year-on-year increase of 120.1%. Companies like Hesai Technology and RoboSense are rapidly scaling up production of their LiDAR products, driving rapid revenue growth and improving profitability. Looking ahead to 2026, multiple vehicle models priced above 400,000 RMB are advancing with increased LiDAR adoption and performance upgrades, which is expected to further expand the industry's scale. Concurrently, as related products gradually deliver economic benefits within the automotive sector, leading companies are actively expanding their business scope. On one hand, they continue to advance R&D for high-performance products and in-house component development to solidify competitive barriers; on the other hand, they are steadily expanding into areas like L4 autonomous driving and embodied intelligence to unlock new growth avenues.
Smart Driving Chips: Continuous Product Innovation, Trend of Rising Volume and Value Continues
Based on NE Times Smart Vehicle data, the installed volume of domestic smart driving domain controller chips is forecasted at 8.62 million units in 2025, a year-on-year rise of 60.2%. Among these, shipments of medium-to-high computing power smart driving domain controller chips are growing rapidly alongside the accelerated adoption of urban/highway NOA functions, driving increases in both product volume and value. Specifically, ASIC chips are gaining significant volume due to their higher computing power utilization, lower cost and energy consumption, and better software-hardware compatibility. Looking forward, the performance of smart driving chips will continue to improve and gradually integrate with cockpit functions, which is expected to further drive up product value, sustaining the industry's trend of rising volume and value.
Smart Driving Domain Controllers: Democratization Drives Product Volume, Leading Companies Strengthen Market Position
According to NE Times New Energy data, the installed volume of smart driving domain controllers in the domestic market is projected at 6.82 million units in 2025, a substantial year-on-year increase of 110.17%. In terms of product structure, under the trend of accelerating penetration of highway & urban NOA, medium-to-high computing power smart driving domain controllers, which have higher value per vehicle, are scaling up rapidly. On the profitability front, several leading companies in the industry have already achieved revenue exceeding 6 billion RMB. They continue to counter pressures such as annual price reductions from automakers by enhancing economies of scale and improving operating cash flow, leading to steady profit growth. Furthermore, leading companies are continuously improving their global production capacity layout to enhance delivery capabilities, with capital expenditures for several firms increasing year-on-year in 2025.
Intelligent Chassis: Multiple New Products Begin Mass Production, Driving Chassis Intelligence Upgrade
In 2025, products like EHB and EPS are further scaling up, driving performance growth for intelligent chassis companies. From an industry trend perspective, intelligent chassis will gradually achieve coordinated control of braking, steering, and suspension to further improve passenger comfort and reduce response times. Currently, the industry is in the stage of component-by-wire adoption, with products like steer-by-wire, EMB, and active suspension beginning to penetrate the market. Among these, steer-by-wire offers advantages such as lower latency, more precise control, higher transmission efficiency, and more flexible arrangement. These products have already been integrated into some flagship models launched by automakers and are expected to accelerate in volume. EMB can further shorten braking response time to 80-100ms, with mass production commencing. Active suspension is expected to further penetrate into the 500,000 RMB price segment.
Robotaxi: Leading Companies Achieve City-Level Unit Economics Breakeven, Commercialization Accelerates
According to company announcements, some leading Robotaxi automakers have launched new-generation Robotaxi models, significantly reducing vehicle depreciation costs while increasing vehicle density. In 2025, the Robotaxi business of some automakers accelerated its commercialization. Looking ahead to 2026, some leading Robotaxi automakers plan to increase their Robotaxi fleet size to expand operational areas and boost vehicle density. On the other hand, related companies are continuously exploring asset-light business models to reduce capital expenditure pressure for subsequent vehicle deployment and to create more diverse revenue streams and better profitability.
Risk Factors
Potential risks include a downturn in automotive industry sales; slower-than-expected adoption of new smart driving technologies; weaker-than-expected support policies for smart driving; and the occurrence of severe accidents related to smart driving.
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