Insights into the Evolution of the Automotive Travel Industry Under the Auspices of the Pax100 Group

Author: Zheng Wen

As early as 1999, Xu Guanhua, then Minister of the Chinese Ministry of Science and Technology, pointed out keenly that “China’s information industry is short of chips and souls.” Chips refer to microchips, while souls refer to operating systems.

Unfortunately, more than 20 years have passed, and these two sharp knives are still looming large. In the China-US trade war, the playing of simply one card, the chip, has severely impacted multiple industries, including the automotive industry. Today, the frenzied investment in semiconductors by the Chinese people represents an urgent attempt to catch up.

The other knife is also hovering above our heads. Equally important as the strategic importance of chips, the operating system also occupies a key position in the industry, acting as the key link between preceding and following processes.

As fundamental industries at a critical juncture of transformation, in the unprecedented period of the “new four modernizations,” the automotive industry feels the pain of being short of chips and souls more acutely. Both the operating system and chips still seriously “choke its neck,” with the current level of independence remaining below 5%. Even in the most sophisticated information entertainment systems, the degree of self-reliance in automotive operating systems does not exceed 5%.

However, this is a once-in-a-lifetime opportunity for the industry to leapfrog. This requires our generation to strive for it through sweat and hard work, only in this way can a future not be “choked up.”

Surviving the Ups and Downs

On the morning of July 14th, at the Zebra Intelligence Mobility Financing Ceremony held at Shanghai Hongqiao Ali Center, the general manager of CITIC Securities, Zhai Jun, had some thoughts to share.

“The shortage of chips and souls in China’s intelligent automotive industry has not been alleviated, and one of the most important areas that is a sore spot is our automotive operating system. However, most of the domestically made automotive systems are based on foreign systems such as Linux, Android, and QNX. Only Zebra is truly doing starting from the bottom up, realizing self-reliance and achieving mass production and landing.”

In order to create the soul of the Chinese automotive industry, Alibaba Group, SAIC Group, CITIC Securities, Yunfeng Fund, and other four major shareholders have once again joined hands to increase their investment in Zebra Intelligent Mobility by RMB 3 billion. The increased funding will be focused on R&D of the automotive operating system and attracting related management and technical talents.

It is understood that among the attendees of the event are many automotive industry capital institutions such as FAW Capital, GAC Capital, China Life Capital, and Sinopec Capital, as well as several fund managers who are interested in the secondary market.

“Zebra Intelligent Mobility is a thousand-mile horse. I said this three years ago when the first investment was made, and now I am even more convinced that it is a horse with rich heritage and strong internal energy. Surviving the ups and downs is no problem,” said Zhai Jun. These words not only reassured the capital moguls present but also evoked memories and resonated with many members of the Zebra team.In November 2015, Alibaba Group and SAIC Motor Corporation Limited formed a joint venture named Banma Network, with a total investment of 1 billion RMB. Eight months later, the internet-connected Roewe RX5 car equipped with the Banma CarLife system was launched and both became popular.

After a wave of hype surrounding the concept of internet-connected cars, Banma Network faced tough competition from numerous imitators, and experienced some turbulence in its personnel and organizational structure, causing a period of dormancy.

During this time, as the industry recognized the trend of software-defined cars, the electronic and electrical architecture of cars underwent an upgrade. Bosch and other leading companies proposed a phased evolution path of “traditional distributed electronic and electrical architecture – domain controller architecture – centralized electronic and electrical architecture”.

In August 2019, Banma, which was struggling at the time, experienced a turning point. Alibaba and SAIC announced their strategic restructuring of Banma, with Alibaba becoming Banma’s largest shareholder. On December 2nd, the integration officially began, with Alibaba injecting its years of research and development of YunOS (formerly known as AliOS) and its overall intellectual property and business knowledge into Banma. From that point on, the new Banma possessed the full-stack development capabilities of car operating systems from the bottom to the top layers of the car’s scenario functions.

In May 2020, the strategic restructuring was officially completed.

In that same year, the Banma Intelligent Driving subsidiary formulated the OS strategic trilogy: gradually evolving from the intelligent car-machine OS to the intelligent cabin OS, to the intelligent vehicle OS, fitting the evolution path of the E/E architecture proposed by Bosch.

It was indeed a special year, as Banma Intelligent Driving completed its strategic restructuring, upgraded its business model, and increased investment in technology research and development. At the Banma Intelligent Driving’s inaugural technology festival at the beginning of the year, all of these achievements were demonstrably presented through actual products, forward-looking strategic layout, and the industrial ecosystem.

All signs point to a thriving and prosperous future.

The Operating System is a Critical Player

Under the trend of software-defined cars, the core technology loop of chips + operating systems + middleware + application algorithm software + data is essential for the realization of intelligent cars. Whoever can grasp one link in this core technology loop will gain a foothold in the new automotive industry chain.

From the transition from traditional cars to intelligent cars, how important are car operating systems (OS)? Just as Windows is to PC, and Apple’s iOS and Google’s Android are to smartphones, the importance of operation systems in intelligent cabins cannot be overstated. The OS plays a key role in managing and controlling the hardware and software resources of intelligent cabins, and can be said to empower hardware with “vitality”.Due to different safety requirements for the driving and cabin systems, automobile operating systems are mainly divided into two categories: autonomous driving OS and intelligent cabin OS. Generally, intelligent cabin OS focuses on openness, compatibility and ecology, while autonomous driving OS focuses on real-time, safety and stability.

Currently, independently developed operating systems on the market include Google’s Android Auto, as well as emerging systems such as Tesla’s Version, Volkswagen’s VW.OS, Huawei’s Harmony OS, and AliOS. By contrast, the operating systems of major OEMs such as BYD Dilink, Chery GKUI, NIO OS, and Xpeng Xmart OS are based on basic operating systems such as Linux or Android (which is widely used in China) and undergo limited customization development. This is the most common approach employed by most OEMs.

In the early stages of the development of intelligent vehicles, development efficiency is the main theme. Most car manufacturers adopt a vertical development trend in which they rely on software customization and transformation, as well as some self-development and integration of intelligent hardware – this is similar to the initial development of smartphones ten years ago.

However, although operating systems based on Android have the advantages of being open source with flexible customized development and portability, there are also drawbacks such as inferior security and stability, as well as overreliance on Google.

Moreover, as the development of intelligent vehicles deepens, automobile operating systems will show a “Matthew effect” or self-reinforcing cycle. ZF Friedrichshafen CEO Wolf-Henning Scheider believes that this window of opportunity is only two years.

On the other hand, this is also a big market. According to McKinsey’s prediction, by 2030, the global market for automotive software and electronic and electrical systems will reach $469 billion, almost double that of 2020.

As the saying goes, big water breeds big fish. Now, ZF Friedrichshafen’s autonomous driving subsidiary, A.I. company ZF ProAI, has more than 11 years of operating system technology accumulation and has become a big fish. With over 100 million lines of code and over 2000 related patents, ZF ProAI has collaborated with major car manufacturers such as SAIC, FAW, and Volkswagen, covering more than 3 million intelligent car users and more than 10 billion interactions between humans and cars.

At this critical juncture, ZF Friedrichshafen continues to invest in its autonomous driving subsidiary, and their ambitious goals are clear.

“Wind Racer” rises again

On July 6, 2016, at the Alibaba Cloud Computing Conference in Hangzhou Yunqi Town, a SUV called the Roewe RX5 welcomed the most expensive spokesperson combination.Ma Yun and Chen Hong are sitting in the backseat of this SUV, while Wang Jian is in the passenger seat, and the driver is Alibaba Group CEO Zhang Yong. As the first car jointly built by Alibaba and SAIC, the Roewe RX5 was unveiled with the title “the world’s first Internet car” at Yunqi Town. Alibaba and SAIC internally defined this “battle” as the “Normandy Landing” of the transformation and upgrading of the auto industry for a century.

Shortly after its launch, the Roewe RX5 became a “net celebrity car” of that year, with more than 25,000 orders in the first month, and sales exceeding 20,000 for several months in a row, of which more than 70% were internet-enabled models.

After this brilliant moment, Baidu experienced a period of difficulties. Opportunities came again with SAIC’s L project. At the end of 2018, Chen Hong, Chairman of SAIC Group, personally led the project, while President Wang Xiaoqiu served as the overall commander. This project belongs to the “number one” project and aims to create a high-end intelligent pure electric vehicle.

“After Roewe RX5, Zebra Auto presented the best opportunity for Baidu,” said Zhang Chunhui, Co-CEO of Baidu Intelligent Driving Division. Baidu had to seize this opportunity.

On the L project, a typical QNX+Android assembled fusion intelligence solution was developed at high cost by SAIC for nearly a year, but it exposed some difficult problems in the process of progress.

Xiao Feng, Chief Architect of Baidu Intelligent Driving, led the team to SAIC Group, showing proof of concept for the intelligent cockpit OS based on AliOS. The most intuitive part is that the content between multiple screens can flow, and applications can be displayed across screens, making multi-screen interaction possible.

This available POC was designed with the top-level architecture accurately after the full industry research and demonstration by the large system team led by Xiao Feng since the second half of 2019, and was tirelessly worked out based on the 10-year operating system industry experience accumulated by AliOS.

The technological highlights shown in this POC exhibition are eye-catching to Jiang Jun and Liu Tao, Joint CEOs of Zebra Auto, which also opened up a larger space for product design thinking. In Liu Tao’s view, in the original Q+A solution, the four screens in the car are still independent “lakes,” which makes it difficult to create differentiated product experiences compared with other brands in the industry, while the solution provided by Baidu Intelligent Driving connects the isolated lakes, forming a “sea” that has never been seen before.By the end of September, SAIC Group’s chief engineer, Zu Sijie, decided to adopt Zebra’s intelligent cockpit operating system in Project L. Zebra’s COO, Huang Youyong, believes that “the core value of an operating system is cross-domain integration, and it may bring huge product value.”

Indeed, Zebra’s intelligent cockpit operating system can better support SAIC’s SOA platform strategy and integrate various endpoints in the car.

Using IM Auto as an example, it adopts a new generation of domain fusion centralized computing digital architecture, with IPD intelligent driving center, ICC intelligent computing center, ICM intelligent cockpit center, and IMATE intelligent partner four domain controllers. Zebra’s intelligent cockpit operating system is not only the software core of the cabin domain but also supports data exchange with other domains.

Starting from the fourth quarter of last year, IM Auto’s technology team has gradually come to Zebra, and the two sides have started joint office work. In the Shanghai Auto Show in April this year, IM Auto’s first model, IM L7, officially started pre-sale, and Zebra’s heterogeneous fusion intelligent cockpit operating system also announced its landing. This marks the official entry of Zebra’s OS strategy into the second chapter.

It is reported that the interactive experience in IM Auto’s intelligent cockpit is expected to be open to the public in the fourth quarter of this year, at which time Zebra’s products will be officially unveiled.

“We are confident to create the strongest model for IM Auto.” Several Zebras said in an interview.

“Today, we have a heterogeneous operating system that is constantly evolving the entire vehicle’s intelligent operating system. At this time, it will sink down to a basic software. On top of it, our partners will have more space to do personalized and customized innovations.” This is Zhang Chunhui’s perfect idea for the operating system.

“At this time, I think more collaboration is needed. Everyone does not need to repeat doing basic software. This basic software must undergo sufficient time and scale to polish. Today AliOS has been verified over more than 10 years and has gone through large-scale verification. It can help automotive intelligence”.

Today, the reborn Zebra is no longer alone, and there are more and more comrades-in-arms who travel with them.

On April 19, the first day of 2021 Shanghai International Auto Industry Exhibition, Zebra reached strategic cooperation with Suteng Juchuang and AutoX in operating systems, fusion perception, autonomous driving AI algorithms, etc. The three parties will work closely together to create a new generation of intelligent cockpits based on human-machine co-driving, jointly promote high-level autonomous driving platforms, and lay out the entire vehicle intelligent operating system.

On the first day of the 2021 World Artificial Intelligence Conference on July 8, Baidu Apollo and Chery’s intelligent company “Zhixing Block” Lion technology signed a cooperation framework agreement at the Alibaba booth, and the two parties will jointly establish a automobile intelligent joint laboratory. According to the agreement, Baidu Apollo and Lion Technology will form a technical team to carry out deep cooperation in the fields of smart cockpit, smart car cloud, data operation, and autonomous driving.

From the cooperation with Chery Lion, it can be seen that Baidu Apollo and intelligent companies under automobile companies are moving towards integration and cooperation from the generally recognized state of competition. In other words, Baidu Apollo is playing the role of the empowerer.

Developing a thick operating system with “OS+AI+chips” to expand the moat

With the continuous cultivation in the field of operating systems, Baidu Apollo’s understanding of this field is also deepening.

On July 10, at the Alibaba Cloud forum of the World Artificial Intelligence Conference, Baidu Apollo’s Tianpu AI platform was officially released. The platform integrates technology from DAMO Academy, Tmall Genie, and Baidu Apollo’s self-developed technologies, precipitating AI interaction, AI perception, and AI scene-based service capabilities, realizing efficient automation processes, online continuous self-learning and growth, and flexible output. At the same time, the Tianpu platform technology also quickly empowers automobile companies and will be the first to be launched on the Roewe Whale in the fourth quarter.

Obviously, AI has become an important part of Baidu Apollo’s “OS+AI + chip” core layout.

At this year’s China Automobile Blue Book Forum, Xu Qiang, chief information officer of Baidu Apollo, stated in his keynote speech that although the intelligent configuration is getting higher and higher, the intelligence perceived by users has not increased synchronously, resulting in a phased user “perception gap” caused by multiple “brains” in the car and multiple domains.

“Just like ‘one human brain plus four car brains that are relatively segmented and driven together’, it is easy to produce an unintelligent perception. To reduce the user’s perception gap, we need to use ‘chip+OS+AI’ as the core of decision-making of intelligent vehicles, and achieve whole vehicle intelligence through centralized car brain.”

Baidu Apollo has honed and precipitated leading algorithmic technology and reliable on-board AI products with about one million smart cars’ scenarios. On this basis, the new Baidu Apollo after strategic restructuring has received the blessing of world-class algorithm technology from DAMO Academy and the voice ecology ability of Tmall Genie, building a strong technology foundation.

Underneath the tip of the iceberg of Banma AI lies two formidable role players: the DAMO Academy, possessing powerful general AI capabilities, including speech and natural language processing, multimodal abilities, and trillion-level parameter pre-trained models; and the Tmall Genie, equipped with rich natural language interaction skills and IoT device interconnectivity capabilities of 300 million.

Over the past year, after the launch of Banma Smart AI assistant Xiao Genban, compared to the previous system, user activity has increased by a factor of 1, intelligent service times by a factor of 14, covering more than 70 models from 28 different brands, and connecting with Tmall Genie’s business, achieving interconnectivity among 30 million IoT devices for smart cars.

In the past 11 years, 4,000 days and nights, from the predecessor of AliOS, to Banma Network, and then to New Banma, this team has gradually broadened its path.

Just this month, Banma Smart AI and SAIC Roewe jointly announced that as a reward for the trust and support of millions of car owners, the internet-connected car Roewe RX5 will officially launch OTA upgrades, and the intelligent networking system of Roewe RX5 models will be upgraded for free to Banma Smart Venus Intelligent System, which is based on AliOS to create the next generation of intelligent networking system.

At this moment, Banma Smart AI in 2021 has magically linked with Banma Network of the 2016 Yunqi Conference as the “world’s first mass-produced connected car” Roewe RX5 spreads its wings and takes flight.

This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.