According to Nikkei, Chinese automakers — notably SAIC Motor, Changan, Great Wall Motor, BYD, Li Auto, and Geely — are actively preparing to launch vehicles fully equipped with domestically produced chips. At least two brands plan to begin mass production of such vehicles as early as 2026.
The report, citing sources, states that Beijing's new political goal is to achieve 100% use of domestic automotive chips by 2027. This significantly accelerates the earlier target set for 2024, which aimed for just 25% of Chinese automakers to adopt local chips. While the goal is not legally binding, it serves as a strategic guideline encouraging companies to align with broader government industrial priorities.
Some manufacturers are already taking steps toward this ambitious target. For instance, Nikkei reports that GAC Group is working closely with Chinese foundries such as SMIC and CanSemi Technology to assess and validate the chip supply infrastructure and replace imported components with local alternatives.
Additionally, authorities have urged leading companies — SAIC, FAW Group, GAC Group, BYD, Geely, Changan, and Great Wall — to accelerate the deployment of chips developed and manufactured within China.
These efforts are facilitated by the fact that most automotive chips can be manufactured using older-generation equipment, which is already available in China.
Nevertheless, Chinese automakers still rely on imported chips, particularly from the U.S., for autonomous driving systems. According to Nikkei, suppliers acknowledge that a full transition to domestic sourcing will be challenging. At the same time, international companies such as STMicroelectronics, NXP, and Infineon are strengthening partnerships with Chinese foundries to meet growing demand from local automakers.
Electric Vehicle Sector: Betting on In-House Chips
It’s worth noting that Chinese electric vehicle makers are also ramping up the development of their own chips. According to SeekingAlpha, citing the Financial Times, XPeng is developing advanced processors for Volkswagen. XPeng has reportedly already created its own AI chips, called Turing, which the company claims outperform those from American giant NVIDIA and will be used in a new generation of smart vehicles.
As a reminder, in July 2023, Volkswagen invested $700 million to acquire a 4.99% stake in XPeng, forming a strategic alliance to co-develop EVs for the Chinese market.