The intelligent connected vehicle in the Chinese market

February 21, 2019

What is ICV industry

The Chinese policy-making institutions advocate for the development of intelligent connected vehicles (ICVs). Within this category, advanced driver assistance systems and vehicle connectivity are considered key components of ICVs.

What’s the data in China – Market

Based on CAICT data, connected car numbers are projected to steadily increase. By 2025, it is anticipated that the total number of connected vehicles will reach 259 million, representing approximately 75.6% of all vehicles on the road.

With the rise of new energy vehicles, increased adoption of intelligent domain control, assisted driving, an increasing number of newly released passenger cars will come equipped with connectivity devices. This trend will significantly contribute to the growth of the embedded connectivity market. In 2022, China's fleet of connected passenger vehicles reached approximately 73 million. It is projected to reach 119 million by 2025, with a compound annual growth rate (CAGR) of 25.9%.

With the continuous iteration, optimization and innovation of ICV application services, and the scale of connected cars continues to rise, the ICV application service market scale will show rapid growth. The revenue scale of China’s ICV application service market in 2022 will be about 134.2 billion yuan, and it is expected that it will reach 222.3 billion yuan in 2025, with a compound annual growth rate of 26.3%.

What’s the data in China – Regulations

What’s the data in China – Market

With the continuous development of intelligent software and hardware, the industry is currently in the transition phase from Level 2 to Level 3, where Level 3 represents functions such as highway/city-based Navigation on Autopilot (NOA) that are gradually being implemented.

In comparison to L1 and L2, where driver assistance remains the primary responsibility of the driver, L4 and L5 are characterized by the dominance of intelligent driving systems. L3 autonomous driving can be seen as a crucial transition point from driver assistance to full automation. In recent years, due to the absence of L3-related policies, some automakers have started promoting concepts such as L2+ and L2.9. With the increasing maturity of L3 technology and functionality, one of the key issues currently surrounding L3 revolves around the clarification of the rights and responsibilities pertaining to human-machine co-driving through policy and regulations in China.

The Chinese government's support for connected vehicles and 5G technology is driving the increasing adoption of T-Box for vehicle telematics in OEM vehicles in China. The rapid deployment of 5G networks is also fueling user expectations for real-time navigation and C-V2X features, further boosting the adoption of 5G connectivity.

In terms of software, half of the vehicles already have Over-The-Air (OTA) capabilities, allowing users to receive new vehicle experiences. Connected vehicles are evolving with features like Driver Monitoring System (DMS), currently dominated by time-based reminders but gradually incorporating camera-based solutions, and Occupant Monitoring System (OMS).

User interaction in vehicles primarily relies on screens, with a growing number of vehicles equipped with infotainment screens larger than 10 inches. Additionally, there is an ongoing improvement in the utilization of windshield heads-up display (W-HUD) and augmented reality heads-up display (AR-HUD).

Furthermore, the upgrade of Electrical/Electronic (EE) architecture is driving enhancements in domain control architecture. The penetration rate of domain control electronic components is evident in early implementations of connected vehicles with domain control.

What’s behind the data in China - Roadmap

What’s behind the data in China - Value chain