Open Source Securities: Regulatory easing helps accelerate the mass production and implementation of wired control devices EMB/SBW, expected to promote popularization.

Open source securities released a research report stating that the braking system can be divided into control/energy supply/transmission/brake device, and the upgrade process is based on the electronic process of each structural component; linear control braking is divided into EHB (electronic hydraulic)/EMB based on whether the power transmission system relies on a hydraulic system. The relaxation of regulations in 25 years has removed obstacles for domestic production/export of EMB; by the end of this year to early next year, one can expect the bulk release of models equipped with EMB. In terms of market size and structure, it is expected that by 2030, the domestic braking market will reach 50 billion, with EMB accounting for 16.4 billion; considering overseas+Robotaxi, the market size is expected to further expand; the pace of domestic manufacturers' production is approaching that of overseas giants like Bosch, with hopes for a balanced competition. The main points of Open Source Securities are as follows: -Linear control chassis pursues human-machine decoupling to achieve L3/L4, and considering only the domestic linear control chassis, the market size is expected to exceed one trillion by 2030. -Linear control braking/steering (high threshold for both+ narrowing gap between domestic and foreign capital+ low penetrationdomestic suppliers have great potential), linear control suspension (high ASP+ low penetration, technical difficulty and correlation with high-level autonomous driving weaker than steering/braking) are directions worth focusing on; the main changes in the linear control chassis this year are the completion of strong marking/strong marking consultation drafts for braking and steering, which are expected to clear obstacles for the mass production of electronic mechanical braking (EMB) and linear control steering (SBW); it is expected to achieve compliant mass production landing by 2026. -Linear control braking/steering is of great significance for improving driving experience & ensuring autonomous driving safety, and may temporarily replicate the positioning of LiDARnot only required for high-level autonomous driving models, but also important safety components; they might promote functions such as AEB/parking, making them potential highlights for car manufacturers, and the speed of price reduction may exceed market expectations. Regarding linear control braking: EMB allowed to be officially implemented in vehicles from January 2026 The braking system can be divided into control/energy supply/transmission/brake device, and the upgrade process is the electronic process of each structural component; linear control braking is divided into EHB (electronic hydraulic)/EMB based on whether the power transmission system relies on a hydraulic system. Regarding EHB: it can be divided into pump-driven EHB and motor-direct-driven EHB, with the latter being mainstream; the motor-direct-driven EHB excels in one-box cost-effectiveness; for L3 and above levels, based on the realization of one-box, an independent braking unit (RBU) is a necessity. EMB actuation completely relies on the motor without the need for hydraulics, offering various advantages over EHB (such as shortened braking time/lighter and more flexible parts deployment/precise independent control of each wheel), but it also faces challenges in safety redundancy, voltage, heat dissipation, and other aspects, with high thresholds. The relaxation of regulations in 25 years has removed obstacles for domestic production/export of EMB; by the end of this year to early next year, one can expect the bulk release of models equipped with EMB. Market size & structure: It is estimated that the domestic braking market will reach 50 billion by 2030, with EMB accounting for 16.4 billion; with considerations for overseas+Robotaxi, the market size is expected to further expand; the pace of domestic manufacturers' production is approaching that of overseas giants like Bosch, with hopes for a balanced competition. Regarding linear control steering: Certification regulations are not detailed yet, but new policies may be expected to catalyze within the year. EPS, which is already a standard feature in passenger cars, can be divided into C/P/DP/R-EPS4 categories according to the motor position; assistance range & accuracy vary, suitable for different vehicle weights/cost models. SBW steering decouples the steering wheel from the wheel, with the motor transitioning from an assistive device to an independent actuator, with the steering system completely taken over by algorithms; SBW is the foundation for removing the steering wheel in L4/5 vehicles. Open Source Securities believes that SBW has pain points when implemented, such as high requirements for control algorithms/difficulty in optimizing road feel simulator/high redundancy requirements, etc.; and SBW has not yet received national standards similar to the implementation standards of EMB; but new policies may be expected to catalyze within the year; in terms of mass-produced models, NIO ET9 has already been certified for implementation, and ZF will match European Mercedes-Benz models in 2026. In terms of experience, SBW is not only essential for L4/5 vehicles, but its ability to release cabin space/flexibility in steering/improve operational experience/reduce turning radius may all become selling points. Market size & structure: It is estimated that the domestic steering system market will reach 50 billion by 2030, with SBW accounting for 21.5 billion; with considerations for Robotaxi+overseas markets, the market size is expected to further expand; in terms of structure, domestic manufacturers represented by NEXTEER/Zhejiang Shibao are expected to challenge the market position of Bosch/ZF. The future of multi-domain integration in chassis Open source securities stated that looking at longer-term technological trends, the next generation of intelligent chassis will break through the boundaries of traditional systems, such as achieving high integration of braking, driving, and steering through "angle modules", fundamentally solving the issues of early intelligent cars such as lag in driving control and nodding effect. Target considerations Suggestions for attention: high-quality leading Tier1 companies with full-range chassis platform capabilities & upstream motor/screw manufacturers, such as: NEXTEER(01316), Zhejiang Shibao(01057), Bethel Automotive Safety Systems(603596.SH), Ningbo Tuopu Group(601689.SH), Zhejiang XCC Group(603667.SH), Shanghai Beite Technology Group(603009.SH), Zhejiang Sling Automobile Bearing(301550.SZ), Shuanglin Co.,Ltd.(300100.SZ), etc. Risk reminders Risks of slower-than-expected regulatory progress; risks of deteriorating competitive landscape; risks of lower-than-expected downstream sales of automobiles; risks of lower-than-expected technological maturity.