In recent times, as one observes the landscape of new energy vehicle manufacturers, the focus seems to be shifting towards two primary trends: flying cars and artificial intelligence (AI). A noteworthy announcement recently surfaced from a rising auto manufacturer, underscoring its intent to harness AI in its endeavorsWith so many new players following suit, one can't help but wonder: what does this trend reveal about the industry? And could AI be the panacea that these new entities desperately seek?

The intriguing assertion comes from XPeng Motors, which reaffirmed its ambitions of becoming an AI-centric entityAccording to reports from Jiemian News, XPeng's chairman and CEO, He Xiaopeng, articulated in an internal communication that the next decade would be dominated by artificial intelligence, predicting that its advancement will dwarf that of the mobile internet eraHe is confident that no one can thwart such a sweeping trend, and he envisions XPeng emerging as a global leader in automotive AI.

Over the past year, XPeng has invested an impressive 3.5 billion RMB in AI research and development, focusing on intelligent driving technologies

The company has launched an autonomous driving system that spans the entire nation and continues to enhance its overall smart ecosystemIn April 2022, XPeng embarked on an "end-to-end" approach to AI development and introduced a corresponding intelligent driving solution by May of this yearIn his correspondence, He Xiaopeng expressed his commitment to unwavering investment in AI technologies for the next decade, aiming to translate technological advancements into product superiority and cost efficiency.

He Xiaopeng lauded XPeng’s achievements in several domains, revealing that the company exceeded its gross margin objectives significantlyHe detailed XPeng's improvements in product technology, marketing strategies, organizational structure, and workflow efficiency, ensuring that the company can define its products and deliver them effectively.

The landscape will become increasingly competitive in 2025, as He anticipates an outbreak of price wars starting January

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XPeng's strategy involves launching new models equipped with their proprietary AI technology throughout that year, with substantial new releases and updates expected every quarter.

Another player, Li Xiang, the chairman and CEO of Li Auto, shared a similar enthusiasm for AI's expanding role in the automotive landscapeHaving reemerged into the public eye after a nine-month hiatus, he stated, “AI means everything to Li Auto.” Li asserts that artificial intelligence will serve as the principal gateway to all devices, services, applications, and transactions, turning it into an indispensable element for modern companies like AppleIn his view, pondering over AI’s potential and embedding it within automotive functions could redefine Li Auto's corporate trajectory.

Li Xiang passionately believes that any significant AI product must autonomously utilize all available devices while incorporating all necessary services

His vision for a true AI super application extends beyond vehicles; it includes integration with smartphones, computers, and even smart glassesLi Auto's strategy encapsulates a major investment of over 10 billion RMB in research and development, with almost half directed towards various AI applications.

As several new entrants in the automotive industry increasingly gamble on AI, the question arises: can AI truly alleviate the struggles faced by these manufacturers? Given the rapid technological advancements, many new car manufacturers believe that innovation and intelligent applications through AI could place them ahead in this era of automotive transformation.

AI is undeniably changing the fundamental foundations of the automotive industryThe burgeoning field of autonomous driving stands as a key example of this transformation, advancing from a mere concept into a tangible reality at an extraordinary pace

Today, enhanced automated features such as adaptive cruise control and lane-keeping assist are becoming commonplace, with some manufacturers even achieving high levels of automation in specific scenariosThese enhancements are also paving the way toward achieving completely reliable self-driving capabilitiesThe increase in sensor technology, algorithm optimization, and processing power has vastly improved the safety and reliability of autonomous driving systems.

This wave of change poses a significant threat to traditional vehicle ownership models and market structuresFor instance, services like ride-hailing have proven to be fundamentally disruptive, creating massive shifts in urban transit optionsThis stark reality prompts new automotive companies to realize the necessity of delving into autonomous driving research to secure a foothold in the competitive landscapeHesitation now could mean missing the boat entirely, leading to insurmountable challenges when technology matures and market dynamics solidify.

Moreover, the concept of intelligent cockpits has become a standard for newer vehicle models, with AI serving as the core driving force behind this feature

Creating an intelligent cockpit is aimed at providing a personalized experience for all passengersLeveraging AI, vehicles can identify the passengers' states and automatically adjust conditions like seating, temperature, and humidityBy learning the driver’s preferences, the system can make intelligent recommendations for music or navigation, even allowing voice interactions for tasks such as controlling windows or checking information—all while enhancing safety and driving convenienceNew companies are swiftly recognizing this trend and prioritizing AI in intelligent cockpit research, aiming to carve out competitive differences that draw consumers to their products.

Furthermore, AI not only represents a means to achieve differentiation but also serves as a critical strategy in navigating a fiercely competitive marketWith the electric vehicle market experiencing explosive growth, numerous companies are venturing into the fray, leading to an escalating competitive landscape where consumers face a multitude of choices across brands, models, range capabilities, and price points.

In this context, only those enterprises wielding genuine competitive advantages have the potential to persevere amid heated market rivalries

Traditional tactics such as price wars may attract some customers, but they risk eroding profit margins and jeopardizing the establishment of sustainable competitive edges in the long run.

In more effective contrast, technological advances—especially those driven by AI innovations—provide fresh avenues for new entrants to carve out unique nichesAI applications in automobiles can generate unique selling points; for instance, AI-enabled smart interaction systems can facilitate diverse forms of vehicle communication, creating immersive, enjoyable journeysThese standout AI-driven features not only help attract consumers within saturated markets, bolstering brand loyalty but also support premium pricing strategies, freeing businesses from price competition while enhancing profitability, ultimately fostering ongoing research and development for long-term success.

Another layer to consider is that new vehicle manufacturers are pursuing AI technologies not purely for automotive applications

As Li Xiang suggested, the purpose transcends vehiclesAI's potential extends to all intelligent environments, reflecting another critical motivation for these companies to invest in AI—the pursuit of income sources beyond traditional automotive revenue streams.

For example, with the continual evolution of AI technology, vehicle systems have the capacity to transform into intelligent mobile interfacesBeyond serving in-car functions, these systems could connect to external smart devices, offering a range of functionalitiesImagine a scenario where users can control home appliances through their vehicle's interface—such as pre-cooling an apartment or checking home security feeds—all from the convenience of their carThis interconnectivity broadens AI's applicability, and opens up immense business opportunities for innovative vehicle manufacturers.

By broadening their AI R&D not just for automotive applications but for parallel intelligent spaces, these newcomers can achieve cost-effective reuse of technologies, driving down expenses while expanding market reach

This strategic foresight is a vital consideration for new automotive ventures that delve into the AI realm.

However, while the potential for AI is compelling, the inherent risks cannot be overlookedThe burgeoning interest in AI poses alluring prospects, yet it is crucial to recognize the associated risks interwoven with rapid advancements in frontier technologies, such as high investments and the potential for failure, still hang like a sword of Damocles over these nascent automotive enterprises.

AI research, particularly within cutting-edge realms such as autonomous driving and intelligent cockpit systems, has morphed into a costly undertakingThe expense of hiring top-tier talent, alongside the extensive data acquisition, labeling, and storage requirements, demands ever-increasing financial resourcesReports suggest that for a competitive AI development structure, a new automotive company might need to spend billions annually

For those yet to attain profitability, such financial drains could prove burdensome, especially if future funding fails to meet expectations, potentially jeopardizing their initial investments and even their very survival.

Market conditions are equally complexAlthough the promise of AI in automotive applications is tantalizing, consumer receptiveness and willingness to pay for AI functionalities remain uncertainVarious consumers may hold reservations toward new technologies, particularly regarding safety and reliability concernsFurthermore, the competitive landscape is formidable; both newcomers and legacy auto manufacturers are ramping up their AI capabilities, with tech giants also eyeing entries into automotive AI marketsThis convoluted environment amplifies uncertainty for nascent automotive companies striving to capitalize on AI.

As the tide of new vehicle manufacturers fires up AI initiatives in line with the automotive industry's intelligent transformation, addressing the fine balance between opportunity and risk emerges as paramount for these emerging players