DJI Automotive and Huawei's automotive business will be options that must be considered by established carmakers that are short on smart driving R&D, local media said.
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DJI Automotive, the automotive arm of Chinese drone maker DJI, is reportedly set to receive investment from BYD (OTCMKTS: BYDDF) and FAW Group, promising to become a rival player to Huawei in China's smart driving space.
DJI Automotive has already received investment intent from BYD and FAW, and the parties are currently moving forward with the financing process, local media outlet 36kr reported today.
In terms of valuation, DJI Automotive is asking for about 10 billion yuan ($1.4 billion) from investment institutions, according to the report.
Meanwhile, Huawei is spinning off its automotive business unit and has set up a joint venture with Changan Automobile called Newcool.
The joint venture is valued at more than RMB 100 billion, the 36kr report noted.
Nio (NYSE: NIO), Xpeng (NYSE: XPEV), Li Auto (NASDAQ: LI), and Huawei-backed Aito are aggressively pushing forward the development of smart driving technology, putting pressure on traditional car companies.
For established car companies with insufficient independent R&D capabilities, Huawei's automotive business and DJI Automotive will be the options they have to consider, the 36kr report noted.
Outside of Changan, Huawei has invited car companies including Seres, Chery, Anhui Jianghuai Automobile Group, Beijing Automotive Group, Mercedes-Benz, Audi, and FAW to invest in Newcool, according to the report.
But the high valuation and popularity of Huawei's automotive business unit has some car companies worried that they won't be able to have enough say after taking a stake in the joint venture.
A person whose company has already entered into a partnership with Huawei's automotive business unit said they are preparing to conduct due diligence on DJI Automotive, the report said, adding that FAW is also in talks with DJI about a partnership.
DJI Automotive's overall valuation is around RMB 10 billion, while the valuation can be lower if the carmaker utilizes order resources in the negotiations, according to the report.
DJI Automotive, formerly DJI's automotive business unit, became an independent company in October 2022 when it was spun off from the drone maker.
On April 2, 2023, DJI Automotive announced its next-generation smart driving solution, which enables L2+ assisted driving functions, including city pilot assisted driving, without the need for high-precision maps or LiDARs, at a computing power as low as 32 Tops.
A number of EV makers, including Xpeng and Li Auto, currently use two Nvidia Orin X chips to power the smart driving systems on their top-trim models, delivering a total of 508 Tops of computing power. Nio's models, on the other hand, currently come standard with four Orin chips, delivering 1,016 Tops of computing power.
In a report on April 7, 2023, 36kr said that BYD will use the assisted driving solution provided by DJI Automotive in some of its models.
With its unique algorithmic solutions and cost-control capabilities, DJI Automotive is providing low-cost smart driving solutions and is already being used in models including SAIC-GM-Wuling's Baojun-branded Yunduo EV and the Chery iCar 03, 36kr's report today noted.
($1 = RMB 7.1585)
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