Chinese car manufacturer Geely unveils the first model of its new Lynk & Co brand in Berlin.
Ullstein Bild Dtl. | Ullstein Bild | Getty Images
BEIJING — Businesses from Nvidia Huawei is chasing the vehicle technology market as the electric car industry booms, with Ecarx emerging as a new competitor.
Since 2017, the founder and chairman of the Chinese car conglomerate Geely, Eric Li, has been building Ecarx that supplies software and chip systems for digital car cockpits and driver assistance.
The company reported Wednesday that fourth-quarter revenue rose 22% from a year earlier to $263 million. Geely's car brands, such as Lynk and Co, accounted for 70% of that turnover.
For the same quarter, Nvidia reported that automotive revenue fell 4% year over year to $281 million, even as CEO Jensen Huang called the segment the company's “next billion dollar business.”
Nvidia counts Geely's premium electric car brand Zeekr as a customer for its Drive Orin chip, which uses artificial intelligence to assist the driver, known as a “system on a chip.” Li Auto, BYD's Denza brand and Xiaomi are among Nvidia's other automotive customers.
Ecarx co-founder and CEO Ziyu Shen told CNBC in an interview this week that Nvidia has an edge when it comes to AI-based autonomous driving systems.
“We can't compete with them in this area,” he said, but noted that there is still about 70% to 80% of the auto market that does not need such advanced technology and can more easily buy driver-assistance technology that focuses on safety. .
“Safety will be a very important principle for us,” he said in Mandarin, as translated by CNBC.
Ecarx sells its own “system on a chip” Antora 1000 used by Lynk and Co.
Shen claimed that his company's current products compete directly with Qualcomm's Snapdragon chips, and that new offerings will be coming announced on March 20 will be on par with Nvidia's Orin
So despite conceding Nvidia's current primacy in AI-based technology, Shen is looking at several ways to capture more automotive market share in the future.
Geopolitical advantage?
Ecarx plans to capitalize on sales to local Chinese companies that need to buy from domestic companies for geopolitical reasons, Shen said, adding that the company works with almost all major automakers except BYD in China.
He expects the overseas market will also be a growing business for the company and something that will give it an edge over Chinese competitors such as Huawei.
In recent months, Huawei has announced several deals to sell its operating system and other automotive technology to automakers in China, but has not yet announced any major foreign deals in the sector. The company also sells electric cars through the co-developed Aito brand.
“I think it is very difficult for Huawei to operate globally because it is a sanctioned company,” Shen said. “I think it will be very difficult for Western companies to work with them.”
When asked about the impact of US restrictions on Chinese technology, Shen claimed that his company has isolated its Chinese operations from its foreign operations and is following local compliance requirements regarding AI chip-related activities in the US and intellectual property protection.
Ecarx's website lists offices in the US and Europe, as well as China.
Shen aims for Ecarx to grow its overseas sales from about 10% of current sales to at least 25% next year, and to at least 40% in the next four or five years.
“To be honest, if we can't serve the five largest automakers in the world, it's very difficult for us to become a big company,” he said, “because none of the Chinese [original equipment manufacturers] are among the top five in the world.”
BYD was by far the largest car company in China last year, followed by Volkswagen's local joint venture with FAW, according to data from the China Passenger Car Association that also includes fuel-powered vehicles. Geely came third.
In new energy vehicles, including hybrids and battery-powered cars, BYD ranked first, followed by Tesla, GAC's Aion brand and then Geely, according to association data.