Nvidia achieves success in China by riding on electric vehicle boom – Community News
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Nvidia achieves success in China by riding on electric vehicle boom

On May 10, 2018, in Santa Clara, California, a sign was posted in front of Nvidia’s headquarters.

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Several Chinese electric car manufacturers are turning to US chip giant Nvidia to power their semi-autonomous driving systems as they ramp up competition with Tesla in the world’s largest auto market.

Chinese start-ups Xpeng and Nio are using the Nvidia Drive Orin chip in their latest cars. Baidu, which launched an auto unit called Jidu last year, announced plans to use the same Nvidia chip in its upcoming car, as well as Polestar, a brand under Chinese auto giant Geely.

With this chipset and associated software platform, Nvidia promises the possibilities for fully autonomous driving.

“For a Chinese EV company, or globally, there isn’t much that matches what Nvidia can offer,” said Bevin Jacob, partner at Shanghai-based investment and consulting firm Automobility.

However, these Chinese car manufacturers do not release fully autonomous cars. Instead, they focus on the so-called Advanced Driver Assistance system or ADAS. These are systems that allow the car to perform some functions semi-autonomously, such as changing lanes. For example, Tesla’s ADAS is called Autopilot while Xpeng’s system is Xpilot.

According to Aakash Arora, managing director and partner at Boston Consulting Group, ADAS — along with other features such as fast charging and range — are “the key differentiators” in the high-end electric vehicle space.

“Most EV models today compete in price segments where having ADAS is critical from a customer expectation perspective,” Arora said. “Early adopters of EVs are also likely to be early adopters of technology and value technology features more.”

Tesla Competition in China

Read more about electric vehicles from CNBC Pro

While Tesla is investing in chip design, it’s not realistic for all EV companies, especially start-ups focused on ramping up production and getting customer cars into their hands.

So they are turning to Nvidia for chips to power ADAS functions to rival Tesla.

“Tesla has a clear and definable lead in FSD, with Chinese EV players now aggressively working with Nvidia to close this perceived technology gap,” Daniel Ives, general manager at Wedbush Securities, told CNBC by email.

“Nvidia has strong roots in the Chinese market and it is strategically important to further build its autochip business around FSD.”