Investment Rating - The report does not explicitly state an investment rating for the smart driving industry Core Insights - The smart driving industry is experiencing rapid evolution driven by "end-to-end" and "smart driving equity" concepts, with significant growth in both new energy vehicle sales and smart driving functionalities [3][4][9] - The penetration rate of L2-level smart driving in new energy vehicles in China has increased from approximately 7% in 2019 to around 65% by the first half of 2025, indicating a strong correlation between new energy vehicle sales and the adoption of smart driving technologies [9][10] - The smart driving market is projected to exceed 5 trillion yuan by 2030, with a compound annual growth rate driven by technological advancements and increased consumer acceptance [15][16] Summary by Sections 1. "Equity + End-to-End" Accelerating Smart Driving Evolution - The smart driving industry has seen a significant increase in new energy vehicle sales, which has created a positive feedback loop for the adoption of smart driving technologies [9][10] - The penetration of L2-level smart driving features in new energy vehicles has rapidly increased, reflecting the growing consumer acceptance and market expansion of smart driving technologies [9][10] 2. End-to-End Smart Driving Review - The evolution of end-to-end smart driving can be categorized into four main stages, with advancements in perception, decision-making, and control processes [30][32] - The introduction of the "occupancy network" has enhanced environmental perception capabilities, allowing for more accurate and stable decision-making in complex driving scenarios [46][47] 3. VLA Technology Route - The VLA (Vision-Language-Action) model is emerging as a key driver of paradigm shifts in autonomous driving, integrating visual, linguistic, and action modalities into a cohesive framework [70][71] - The VLA model's development is divided into four stages, with significant advancements in task understanding and execution capabilities [76][77] 4. World Model Technology Route - The world model approach emphasizes physical reasoning and spatial understanding, representing a long-term evolution path for smart driving technologies [69][70] - The integration of world models with cloud computing is expected to enhance the iterative optimization of end-to-end smart driving systems [65][66]