Finance

China’s electric car race is becoming all about semiconductors

Published

2 months ago

August 29, 2024

Shaoqing Ren, vice president, autonomous driving development, at Nio speaks about the electric company’s 5nm chip at its tech day in Shanghai on July 27, 2024.

CNBC | Evelyn Cheng

BEIJING — Chinese electric car companies that are already engaged in an intense price war are turning up the heat on another front: Chip-powered tech features such as the driver-assist function.

Nio and Xpeng have announced that their in-house designed auto chips are ready for production. So far, many of the major Chinese electric car makers have relied on Nvidia chips, with the company’s automotive chips business over the past few years bringing in more than $300 million in revenue a quarter.

“It’s hard to point to your product being superior when your competitors use the exact same silicon to power their infotainment and intelligent driving systems,” said Tu Le, founder of consulting firm Sino Auto Insights, explaining why EV makers are turning to in-house chips.

Le said he expected Tesla and Chinese electric car startups to compete on designing their own chips, while traditional automakers will likely still rely on Nvidia and Qualcomm “for the foreseeable future.”

Nvidia reported a 37% year-on-year increase in automotive segment revenue to $346 million in the latest quarter.

“Automotive was a key growth driver for the quarter as every auto maker developing autonomous vehicle technology is using NVIDIA in their Data Centers,” company management said on an earnings call, according to a FactSet transcript.

China is cementing its new position as the world's center of automotive manufacturing: Analyst

“I think the main reason why Chinese [automakers] pay attention [to] self-development system-on-chip is the success of Tesla in full-self driving,” said Alvin Liu, a Shanghai-based senior analyst for Canalys.

In 2019, Tesla reportedly shifted from Nvidia to its own chip for advanced driver-assist functions.

By designing their own chips, Chinese automakers can customize features, as well as reduce supply chain risk from geopolitical tensions, Liu said.

Liu does not expect significant impact to Nvidia in the short-term, however, as Chinese automakers will likely test new tech in small batches in the higher-end of the market.

Leveraging latest tech

Nio in late July said it had finished designing an automotive-grade chip, the NX9031, that uses a highly advanced 5 nanometer production technology.

“It is the first time that the five-nanometer process technology has been used in the Chinese automotive industry,” said Florence Zhang, consulting director at China Insights Consultancy, according to a CNBC translation of her Mandarin-language remarks. “It has broken through the bottleneck of domestic intelligent driving chip research and development.”

Nio, which had teased the chip in December, plans to use it in the high-end ET9 sedan, set for delivery in 2025.

The 5 nanometers technology is the most advanced one for autos because the 3 nanometer tech is mostly used for smartphone, personal computer and artificial intelligence-related applications, CLSA analyst Jason Tsang, said following the Nio chip announcement.

Xpeng at its event on Tuesday did not disclose the nanometer technology it was using for its Turing chip. The company‘s driver-assist technology is widely considered one of the best currently available in China.

While Xpeng revealed its chip on Tuesday, Brian Gu, Xpeng president, emphasized in a CNBC interview the day before that his company will primarily partner with Nvidia for chips.

The two companies have a close relationship, and Xpeng’s former head of autonomous driving joined Nvidia last year.

Giants in China’s electric car industry are also recognizing the importance of chips for autos.

If batteries were the foundation for the first phase of electric car development, semiconductors are the basis for the industry’s second phase, as it focuses on smart connected vehicles, BYD‘s founder, Wang Chuanfu, said in April at a press conference held by Chinese driver-assist chip company Horizon Robotics.

Wang said more than 1 million BYD vehicles use Horizon Robotics chips.

BYD on Tuesday announced its Fang Cheng Bao off-road vehicle brand would use Huawei’s driver-assist system.

U.S. restrictions on Nvidia chip sales to China haven’t directly affected automakers since the cars haven’t required the most advanced semiconductor technology so far.

But with increasing focus on driver-assist tech, which relies more on artificial intelligence — a segment at the center of U.S.-China tech competition — Chinese automakers are turning to in-house tech.

Looking ahead to the next decade, Xpeng Founder He Xiaopeng said Tuesday the company plans to become a global artificial intelligence car company.

When asked about the availability of computing power for training driver-assist tech, Xpeng’s Gu told reporters Monday that prior to the U.S. restrictions the company had been working with Alibaba Cloud. He claimed that access now probably gives Xpeng the largest cloud computing capacity among all car manufacturers in China.

Creating new tech and standards

Government incentives, from subsidies to support for building out a battery charging network, have helped electric cars take off in China, the world’s largest auto market.

In July, penetration of new energy vehicles, which includes battery-only and hybrid-powered cars, exceeded 50% of new passenger cars sold in China for the first time, according to industry data.

That scale means that companies involved in the country’s electric car development are also contributing to new standards on tech for cars, such as removing the need for a physical key to unlock the door. Instead, drivers can use a smartphone app.

How that app or device securely connects drivers to their cars is part of the forthcoming set of standards that the California-based Car Connectivity Consortium is working on, according to president Alysia Johnson.

A quarter of the organization’s members are based in China, including Nio, BYD, Zeekr and Huawei. Apple, Google and Samsung are also members, Johnson revealed.

She said the organization is looking to enable a driver of a Nio car that uses a Huawei phone to securely send the car “key” to a partner who uses an Apple phone and drives a Zeekr car, for example.

“Digital key tech is becoming a lot more accessible than people would think,” she said.

Finance

Biden administration forgives $4.5 million in student debt for 60,000 borrowers

Published

10 hours ago

October 18, 2024

Business Finance News

Borrowers who serve in the public service sector and government are eligible for this forgiveness. (iStock )

Another 60,000 student loan borrowers will receive student loan relief in the coming weeks. The Biden Administration announced $4.5 billion in relief for public service workers such as nurses, teachers and social workers.

The relief comes as a fix to the original Public Service Loan Forgiveness (PSLF) program. The program was initially signed into law by George W. Bush in 2007 to give non-profit and government employees loan forgiveness after 10 years in the workforce.

“Before President Biden and Vice President Harris entered the White House, the Public Service Loan Forgiveness program was so riddled by dysfunction that just 7,000 Americans ever qualified,” U.S. Secretary of Education Miguel Cardona said in the Education Department’s press release.

The new relief intends to pay down the loans of borrowers who were originally denied acceptance or who have still not received relief after making the 120 required monthly payments.

“Today’s announcement comes on top of the significant progress we’ve made for students and borrowers over the past three years,” President Joe Biden said in a statement.

“That includes approving debt cancelation for nearly 5 million Americans across all our various debt relief actions; providing the largest increases to the maximum Pell Grant award in over a decade; fixing Income-Driven Repayment so borrowers get the relief they earned; and holding colleges accountable for taking advantage of students and families,” Biden said.

If you have private student loans, federal relief doesn’t apply to you, unfortunately. If you’re looking to lower monthly payments and ease the burden of student loan debt, consider refinancing. See what your interest rate could be via the online marketplace Credible.

IS COLLEGE DEBT WORTH IT?

Resources available for students affected by the recent hurricanes

Hurricanes Helene and Milton have wreaked havoc on many communities in the south, causing serious physical damage and severely disrupting educational services. In response, the U.S. Department of Education released resources to help students and institutions of higher education recover.

“I have directed our team at the Department of Education to leverage every possible resource available to meet the needs of impacted students, families and school communities,” Cardona said.

The new resources include support for recovery needs like mental health care for students and educators, technical assistance and flexible financial aid policies at affected universities. Many students are also automatically being enrolled in natural disaster forbearance, so they don’t have to worry about their loans while recovering from the hurricanes.

Most of these resources will be concentrated on Georgia, which has seen a substantial amount of damage. The Readiness and Emergency Management for Schools Technical Assistance Center is a specific program Georgians have access to. It helps education agencies manage their safety, security and emergency management programs.

The Early Childhood Technical Assistance Center is another option that offers resources and links from organizations that help families and children, including those with disabilities, cope with disasters.

If you don’t have federal student loans that qualify for assistance, refinancing could cut your monthly payment. You can use Credible to compare student loan refinancing rates from multiple private lenders all at once without affecting your credit score.

STUDENT LOAN DEBT HAS INCREASED BY 430% SINCE 2003 – HERE’S HOW TO LOWER YOUR DEBT

$70 million in federal funding going to schools for additional mental health services

Along with aid to student loan borrowers and students affected by natural disasters, the Biden administration is also directing federal funding towards mental health services in K-12 schools. The administration announced a $70 million investment that will expand students’ access to mental health support.

“We know that students are more likely to access mental health support if it’s offered in schools, and our educators and school communities are on the front lines when a student is struggling,” Cardona said in the announcement.

“The need for mental health support in our schools remains high,” Cardona said. “Today’s announcement of an additional $70 million will allow more institutions and schools to train and hire mental health professionals – especially in underserved communities – ensuring that every student has access to the care they need to thrive.”

The new funding, combined with the Bipartisan Safer Communities Act (BSCA) investments, will go to 333 grantees across 48 states. It will help communities train and hire 4,000 more mental health professionals across the country.

To see what you’d pay on a private student loan, you can visit Credible today to view a rates table that allows you to compare fixed and variable rates from multiple lenders.

LESS THAN A THIRD OF AMERICANS APPROVE OF HOW BIDEN HAS HANDLED STUDENT LOAN DEBT

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