Dongxing: The commercialization of L3 automotive industry is accelerating, expected to drive the mass application of intelligent chassis.

Dongxing released a research report stating that the Ministry of Industry and Information Technology has granted permission for Changan and BAIC to equip L3 level autonomous driving vehicles, signaling that the commercialization of L3 is expected to accelerate. L3 autonomous driving will promote the mass application of intelligent chassis, including active suspension, electronic brake-by-wire (EMB), and steer-by-wire (SBW). The introduction of related mandatory national standards will support mass production. Investment focus can be placed on vehicle manufacturers and intelligent chassis companies that collaborate deeply with Huawei. Key points from Dongxing's report: Event Recently, the Ministry of Industry and Information Technology's official account released an article stating that Chongqing Changan Automobile Co., Ltd. and BAIC BluePark New Energy Technology Magna Automobile Co., Ltd. have submitted applications for approval of intelligent connected vehicles equipped with L3 conditional autonomous driving functions to the Ministry of Industry and Information Technology. After the acceptance, review, and public notification procedures, the Ministry conditionally granted approval for the related products in the 401st announcement batch. Commercialization of L3 expected to accelerate L3 autonomous driving corresponds to conditional autonomous driving, where the system continuously controls the vehicle's lateral and longitudinal movements during operation and detects and responds to targets and events. Its operating range is limited, and the driver must take over when exceeding this range. However, L3 differs fundamentally from L2 and other assisted driving systems in that it can achieve autonomous driving within a specific range. The products included in the 401st batch of "Road Motor Vehicle Production Enterprises and Products" are two vehicles equipped with L3 autonomous driving functions from Changan and BAIC, reflecting China's approval of L3 products. The report believes that more vehicles with L3 functions will be approved in the future, potentially speeding up the commercialization process of L3. Commercialization of L3 will promote the mass application of intelligent chassis. According to Chongqing Changan Automobile's official account, the approved vehicle in this batch is a Changan Blue car product equipped with its self-developed "Tianshu Intelligent" technology system, but its configuration plan has not been disclosed. On the other hand, BAIC's L3 version, Alpha S, is equipped with a high-performance redundant sensor system, including 34 high-performance sensors, such as three laser radars, enabling full-chain safety redundancy backups in perception, decision-making, steering, braking, communication, power supply, and positioning. The report believes that China has made rapid progress in the hardware and software aspects of automotive intelligence from sensing, decision-making, and planning to execution. With the commercialization of L3, the intelligentization of chassis (active suspension, electronic brake-by-wire, and steer-by-wire) will become the final piece of the puzzle for autonomous driving, providing support for the introduction of L3 and higher-level autonomous driving. The report is optimistic about the future mass production prospects of active suspension, electronic brake-by-wire (EMB), and steer-by-wire (SBW). These are: 1) Active suspension: Integrating air springs, variable damping shock absorbers, and suspension actuators, the road preview system actively adjusts the suspension stiffness and damping coefficients based on road conditions for improved handling and comfort. 2) Electronic brake-by-wire (EMB): The EMB solution will be the direction of development for braking systems from traditional mechanical and electronic braking to electronic brake-by-wire. The mandatory national standard GB21670-2025 "Technical Requirements and Test Methods for Passenger Car Braking Systems," implemented on January 1, 2026, will provide industry standards for the mass application of EMB. 3) Steer-by-wire (SBW): Consistent with the direction of braking system development, steer-by-wire will be the solution for high-level automatic steering systems. In December 2025, China also introduced a mandatory national standard for steer-by-wire, providing industry standards for the mass application of this system. Investment strategy The approval of vehicles equipped with L3 systems by the Ministry of Industry and Information Technology provides policy support for the popularization of advanced autonomous driving in China. Companies that continue to invest in this field will benefit, and attention is recommended to two areas: 1) the application end of complete vehicles, where leading companies have gradually established a leading edge in training data, training facilities, and the intelligent driving ecosystem. Huawei, with its technological expertise in the ICT field and expansion into areas such as connectivity and computing, is committed to building an intelligent world of interconnected things. Huawei is entering a harvest period in the field of intelligent automobiles. Beneficiaries in this area include vehicle manufacturers that collaborate closely with Huawei, such as Chongqing Sokon Industry Group Stock, Anhui Jianghuai Automobile Group Corp., Ltd., BAIC BluePark New Energy Technology, SAIC Motor Corporation, and Chongqing Changan Automobile. 2) In the field of intelligent chassis, benefiting from the commercialization of L3, rapid mass application of intelligent chassis is expected by 2026. With the introduction of mandatory national standards for electronic brake-by-wire and steer-by-wire, as well as active promotion by companies in the industry chain, the report believes that active suspension, electronic brake-by-wire, and steer-by-wire is set to enter the mass application stage in 2026 and beyond. Beneficiaries in this area include companies like Shanghai Baolong Automotive Corporation for active suspension, Ningbo Tuopu Group for electronic brake-by-wire, and Bethel Automotive Safety Systems, Zhejiang Asia-Pacific Mechanical & Electronic, and NEXTEER for steer-by-wire. Risk warning: If the automotive industry's prosperity is lower than expected, the promotion of intelligent driving progresses slower than expected, and the advancement of related technologies and industry chains falls short of expectations.