Investment Rating - The report maintains an "Outperform" rating for the automotive intelligence industry [5][6]. Core Insights - The Ministry of Industry and Information Technology has approved two L3 autonomous driving vehicle models, marking a significant step towards commercial application in China [15]. - Tesla's Full Self-Driving (FSD) technology is expected to receive full approval in China by early 2026 [16]. - XPeng Motors has obtained a road testing license for L3 autonomous driving in Guangzhou, indicating progress in the sector [18]. - WeRide's Robotaxi service has successfully launched in over 10 cities globally, showcasing the commercial viability of autonomous driving technology [20]. - Xidi Intelligent Driving has officially listed on the Hong Kong Stock Exchange, becoming the first public company focused on commercial vehicle intelligent driving [22]. Summary by Sections Industry News - The report highlights significant developments in the L3 autonomous driving sector, including approvals and testing licenses for various companies [15][18][19]. - The report notes the increasing penetration of high-resolution cameras and advanced chips in passenger vehicles, with 800 million pixel cameras reaching a penetration rate of 49.7% by October 2025, up 31% year-on-year [2]. - The market for lidar technology is also expanding, with a penetration rate of 14.3% for passenger vehicles by October 2025, reflecting a 7.9% increase year-on-year [2]. Intelligent Driving - The penetration rate of passenger vehicles equipped with L2 and above functions reached 33% by October 2025, a 19% increase year-on-year [3]. - The report emphasizes the growth in sensor technology, with front-view cameras and radar systems seeing significant adoption [3]. Investment Recommendations - The report recommends investing in companies such as XPeng Motors, Leap Motor, and Geely for complete vehicles, while suggesting L4 companies like Pony.ai and WeRide for autonomous driving technology [3]. - For components, it recommends companies like SUTENG, Hesai Technology, and Horizon Robotics for data acquisition, transmission, processing, and application [3].