It’s not fully autonomous driving, but Chinese electric vehicle manufacturers are making strides when it comes to assisted drivers.
That’s a vital step in earning market share in one of the world’s most competitive electric vehicle markets. Additionally, those advances could create positive implications for select holdings of exchange traded funds such as the KraneShares Electric Vehicles and Future Mobility ETF (KARS).
KARS isn’t a dedicated China ETF. However, it holds several China-based EV manufacturers, as well as other auto giants that sell such vehicles in the country, including Tesla (TSLA) and Volkswagen (VW).
As was recently reported, Chinese EV juggernaut BYD, a KARS component, recently took the crown as the top EV seller in China ahead of Volkswagen.
Many market observers see driver-assisted technology as a prelude to fully autonomous capabilities. Some industry executives view the offering as essential to winning market share in China. Harnessing assisted driving tech could also help pay for original equipment manufacturers over the long term.
“McKinsey estimates assisted and fully autonomous driving systems in passenger cars could generate $300 billion to $400 billion in global revenue by 2035. China is the world’s largest car market,” reported Evelyn Cheng for CNBC.
2 EV Manufacturers Making Strides
KARS member firms Li Auto and Xpeng are among the Chinese EV makers that recently boasted of assisted driving strides. In the case of Xpeng, that company seeks to roll out that tech in new cars across China after previously featuring in just two cities.
“The tech claims to require drivers to do little more than keeping their hands on the wheel, while the vehicle travels to a destination in the city on its own, including stopping at traffic lights,” according to CNBC.
Some market observers view the assisted driving advances as modest. However, those strides are relevant nonetheless because some foreign competitors selling EVs in China don’t offer related amenities. Also, EV manufacturers operating in China have largely focused on pricing as an avenue for luring buyers.
Owing to the tech-savvy reputation of many Chinese consumers, assisted driving capabilities could be a point of attraction for car buyers, which is potentially of benefit for some KARS holdings. KARS, which debuted in January 2018, has $169.46 million in assets under management.
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.