With the rapid development of smart driving technology, competition in China's electric vehicle (EV) market has intensified. Industry sources in China indicate that Qualcomm has cut its rates for the domestic electric vehicle market, focusing on essential smart driving models from prominent automobile manufacturers.

In reaction to Qualcomm's substantial price reductions, competitor Nvidia has reevaluated and modified its market approach accordingly. Nvidia maintains a dominant position in high-end models, but competition pressure in the mid-to-low-tier entry-level market is anticipated to intensify, according to the sources.

• Qualcomm's new pricing approach targets mid- to low-tier vehicles

Qualcomm's most recent pricing strategy is predominantly directed at the mid- to low-tier vehicle market, as per sources within the EV supply chain. The Qualcomm 8650 chipset has dropped in price to approximately CNY3,000 (US$413.93), while the 8620 series has been further discounted to around CNY2,000.

This pricing strategy unquestionably exacerbates the ongoing price war in China's smart driving market and affects the mid- to low-tier EV segment, the sources said. The Qualcomm 8650 and 8620 chipsets are now priced in a manner that is comparable to that of comparable products utilized by BYD.

Qualcomm's cost advantage is derived from its well-established supply chain and economies of scale in mobile chip production, which enables the company to further reduce costs in upstream chip manufacturing and extend this advantage to automotive-grade chips, the sources indicated.

Moreover, Qualcomm has established a turnkey solution model that integrates hardware and software into a comprehensive service. This technique accelerates client development processes, decreases the time-to-market for new car models, and diminishes the adoption threshold for automakers, according to the sources.

One example is the recently announced Leapmotor B10 in China, which uses Qualcomm's 8295 cockpit chip in conjunction with the 8650 smart driving technology. Initially positioned as standard equipment for vehicles priced at CNY300,000, it effectively reduced prices to be used in compact SUV versions priced at CNY120,000, emphasizing its cost-performance advantage.

Industry observers believe that Qualcomm's initiatives have facilitated the swift infiltration of smart driving chips into the entry-level automotive sector.

• Low-cost Nvidia DRIVE Qrin Y for China

Qualcomm's pricing strategy has influenced the broader smart-driving chip industry in China. In reaction to Qualcomm's intensifying rivalry, Nvidia has launched a cost-effective variant of its DRIVE Orin, designated the Y series, in the Chinese market. Although performance is marginally inferior to the Orin X, the price has lowered by around US$100.

Nonetheless, Nvidia's present single-chip cost remains higher than that of Qualcomm's comparable products, according to industry sources in China.

Overall, the price war in the smart driving chip market shows no signs of easing. However, as competition in China's EV industry heats up, the supply chain is expected to face more competition in the coming years. Companies that can master core technology, preserve cost advantages, and create differentiated market strategies will triumph.