China's automobile production and sales volume far exceeds the sum of the United States, Japan, India and South Korea. However, we must have a clear understanding that China is a large automobile country rather than a strong automobile country.

It is worth noting that China's automotive chips are severely constrained. Of the 20 billion automotive chips produced each year, more than 18 billion need to be imported.

1. A large automobile country but not a strong one

In 2009, China's auto sales surpassed those of the United States, making it the world's largest auto market, a position it has held for 15 consecutive years.

In 2023, China's automobile production and sales will both exceed 30 million. The combined sales of the United States, Japan, India, and South Korea, which follow behind, are less than that of China alone.

In the same year, China exported 5.2 million vehicles, surpassing South Korea and Germany, and then Japan to become the world's largest automobile exporter.

and,BYDRepresenting Chinese automakers, it entered the ranks of the world's top ten automakers for the first time.

However, we cannot just indulge in the glorious days of Chinese automobiles, but also need to pay special attention to the dark clouds and rain, because we are only a big automobile country, and are far from being a strong automobile country.

For example, in 2023ToyotaNet ProfitAbout 4.94 trillion yen, equivalent to about 230 billion yuan. During the same period, the top seven Chinese automakers in terms of net profit had a total net profit of only 83.9 billion yuan.

In other words, Toyota's net profit alone is 2.7 times the sum of the net profits of China's top automakers. You can imagine how huge the gap is.

2. Importing 18 billion automotive chips every year

What is more serious is that Chinese cars are still being strangled in the field of chips.

Traditional fuel vehicles require about 300 to 500 chips per car, while new energy vehicles require more chips, more than 1,000 per car.

For high-end new energy vehicles, the number of chips required for each vehicle may even exceed 3,000.

In 2023 alone, the total number of chips used in Chinese cars has exceeded 20 billion. With the acceleration of intelligence, the number of chips required for new energy vehicles in the future will certainly increase significantly.

But what is heartbreaking is that 90% of the chips used in Chinese cars currently need to be purchased and imported from chip companies in other countries.

Luo Daojun, senior vice president of the Components and Materials Research Institute of the Fifth Institute of Electronics of the Ministry of Industry and Information Technology, recently stated at the 2024 China Automotive Forum that my country's automotive chip self-sufficiency rate was less than 5% in 2021. Although it has increased in the past two years, the current self-sufficiency rate is still less than 10%, and there is a significant structural shortage problem.

In other words, of the 20 billion automotive chips produced in China each year, more than 18 billion need to be imported.

3. The road to replacing domestic chips is full of challenges

In the 2023 global automotive chip manufacturers' market share ranking, the top 12 companies are all foreign companies, and they together account for 77.2% of the global market share.

No Chinese chip company has made it onto the list. Chinese automotive chip companies can only occupy 22.8% of the "others" category, with a market share of less than 10%.

In the list, Infineon, NXP, and STMicroelectronics from Europe and the United States are firmly in the top three, with market shares exceeding 10%, and are traditional automotive chip giants. In the field of new energy vehicle chips, Qualcomm and Nvidia basically dominate.

There are two most important chips in new energy vehicles: smart driving chips and smart cockpit chips. In China, these two chips are basically monopolized by Nvidia and Qualcomm.

In terms of intelligent driving chips, NVIDIA's Drive Orin-X chip is far ahead in terms of installed capacity, accounting for 32.6% of the market share.

In the smart cabin chip market, Qualcomm is far ahead with a market share of nearly 60% and very strong dominance. Its Snapdragon series chips have become a selling point for many domestic new energy vehicles.

So much so that there is a saying in the industry: "Nvidia determines China's smart driving, and Qualcomm influences China's smart cockpit."

BYD founder Wang Chuanfu once said: "The first half of new energy vehicles depends on batteries, and the second half will depend on chips."

Chips will undoubtedly determine the success of new energy vehicles in the future. Such important core components must not be entirely controlled by foreign companies.

National policy support and market demand stimulation have provided an unprecedented opportunity for domestic substitution. Independent chip companies such as Huawei and Horizon Robotics, and OEMs such as BYD,auspicious、NIOetc. are all working hard on developing their own chips and have made considerable progress.

However, the road to domestic substitution is still full of challenges. To truly achieve a counterattack, the industry needs joint efforts and continuous innovation.