However, these Chinese carmakers are not putting out fully autonomous cars. Instead, they are focusing on so-called advanced driver-assistance system, or ADAS. These are systems that allow the car to carry out some functions semi-autonomously, such as lane switching. For example, Tesla’s ADAS is called Autopilot while Xpeng’s system is Xpilot.
The U.S. electric vehicle maker does not use Nvidia chips. Instead, it designs its own semiconductors to power its ADAS called the Full Self-Driving (FSD) chip.
“Tesla has a clear and definable lead around FSD with Chinese EV players now aggressively partnering with Nvidia to close this perceived technology gap,” Daniel Ives, managing director at Wedbush Securities, told CNBC by email.
“Nvidia has strong roots in the China market and further building out its auto chip business around FSD is strategically important.”