Core Viewpoint - The mandatory installation of Advanced Emergency Braking System (AEBS) in passenger vehicles is a significant step towards enhancing automotive safety in China, aligning with international standards and improving the competitiveness of domestic brands in global markets [2][3]. Summary by Sections AEBS Implementation - The Ministry of Industry and Information Technology has proposed a shift of AEBS from a recommended to a mandatory standard for M1 class passenger cars and N1 class light trucks, effective from January 1, 2027, for new models and January 1, 2028, for all existing models [2][3]. Technical Challenges - Current challenges include inconsistent technical standards, performance discrepancies among vehicles, and issues such as false activation or failure to activate [3][5]. - The performance of AEBS varies significantly, with some systems only effective below 40 km/h, while others can operate at speeds up to 120 km/h [5]. Cost Implications - The installation of AEBS is expected to increase costs, particularly for lower-priced models, which currently have a low installation rate of 2.6% for vehicles priced below 80,000 yuan [9]. - The cost of AEBS systems ranges from 800 yuan to 5,000 yuan depending on the technology used, which could significantly impact the pricing of budget vehicles [9][10]. Market Growth Potential - The global AEBS market is projected to grow from approximately 3.3 trillion yuan in 2024 to nearly 4.9 trillion yuan by 2031, with a compound annual growth rate of 5.8% [12]. - In China, the pre-installation market alone could exceed 500 billion yuan, considering the annual production of 25 million vehicles [12][13]. Industry Impact - The mandatory AEBS standard will drive technological upgrades across the automotive supply chain, compelling manufacturers to invest in research and development to meet new performance standards [13]. - Suppliers of key components such as sensors and control algorithms are expected to see increased demand, fostering growth in the domestic automotive supply chain [13]. Future of Autonomous Driving - AEBS is a critical component of Level 2 autonomous driving systems and its mandatory installation is seen as a foundational step towards more advanced autonomous driving technologies [14]. - The implementation of AEBS is expected to enhance public trust in autonomous driving, paving the way for future advancements in intelligent driving systems [14].

Group 1 - The Ministry of Industry and Information Technology has released a draft regulation requiring all passenger vehicles to be equipped with Automatic Emergency Braking Systems (AEBS), leading to a rise in automotive parts and passenger vehicle sectors this week [1] - The automotive industry is expected to exhibit a range-bound pattern characterized by strong domestic demand and weak external demand, with constraints on the upside due to the difficulty in sustaining strong fundamentals and support on the downside from a generally stable economic environment [1] - New energy vehicle sales continue to grow significantly, with a year-on-year growth rate of 44.25% in April, while automotive export growth remains low at 1.60% and 1.16% in March and April respectively, creating a counterbalancing effect between strong domestic demand and weak external demand [1] Group 2 - The Automotive ETF (516110) tracks the 800 Automotive Index (H30015), which is compiled by China Securities Index Co., Ltd., selecting listed companies involved in automotive manufacturing, vehicle sales, and related services from the A-share market, covering various segments including passenger vehicles, commercial vehicles, and parts [1]

Core Viewpoint - The newly drafted mandatory national standard for light vehicle automatic emergency braking systems (AEBS) is set to replace the existing voluntary standard, expanding its applicability and requiring M1 and N1 category vehicles to be equipped with AEBS [1][3]. Group 1: Standard Transition - The new standard shifts from a voluntary to a mandatory requirement, expanding the scope to include N1 category vehicles, such as pickups and micro-vans, which were previously unregulated [1][3]. - The new standard introduces performance requirements for recognizing vulnerable road users, including pedestrians and cyclists, enhancing safety measures [1][5]. Group 2: Technical Requirements - The new standard sets higher performance benchmarks, particularly for responding to vulnerable road users, requiring systems to identify and react to pedestrians and cyclists at speeds between 20 to 60 km/h [5]. - Testing methods have been updated to include complex traffic scenarios, with a requirement for at least 30% of tests to be conducted in real-world conditions [5]. Group 3: Market Impact - The implementation of the new standard is expected to significantly increase the demand for active safety components, particularly sensors and braking systems, as all passenger vehicles will need to be equipped with AEBS [11]. - The adoption of AEBS is projected to reduce rear-end collisions by 38% and fatal accidents by 20% to 25%, influencing insurance costs and potentially leading to lower premiums [6][11]. Group 4: Consumer Behavior - The understanding of AEBS among consumers is expected to grow, making the technology and its suppliers a significant factor in purchasing decisions [12]. - The cost of installing AEBS in lower-end vehicles may deter some consumers initially, but long-term awareness is anticipated to mitigate this impact [8][10].

Important Market News - The Ministry of Industry and Information Technology emphasizes the acceleration of 5G-A and 6G technology development to support the construction of a modern industrial system [1] - Focus on meeting enterprise development needs and enhancing market access, fair competition, and credit management systems [1] - Promotion of industrial internet infrastructure across regions and industries to support the high-end, intelligent, and green development of manufacturing [1] Industry Insights - The Ministry of Industry and Information Technology held a meeting to discuss the high-quality development of the industrial mother machine industry, which is crucial for modern industrial systems [2] - China's industrial mother machine market size is projected to grow from 631.36 billion in 2019 to 712.89 billion in 2024, driven by equipment upgrades and new industry demands [2] - The industrial mother machine industry is expected to see continued improvement in 2025 due to rising demand for high-end CNC machine tools [2][3] Automotive Industry Developments - The Ministry of Industry and Information Technology is seeking public opinion on mandatory standards for automatic emergency braking systems (AEBS), marking a shift from recommended to mandatory standards [4] - The new AEBS standard is expected to significantly increase the penetration rate of AEBS in vehicles, projected to exceed 60% by 2025 [5] - The current overall installation rate of AEBS in passenger vehicles is 56.5%, with higher rates in new energy vehicles [5] Brain-Computer Interface Advancements - The establishment of China's first clinical ward for brain-computer interface technology aims to transition from research-driven to clinically-driven applications [6] - The National Healthcare Security Administration has initiated a pricing project for new brain-computer interface technologies, paving the way for clinical applications [6][7] - Domestic companies in the brain-computer interface sector are expected to gradually achieve commercialization [7] Solid-State Battery Innovations - Guoxuan High-Tech has completed its first pilot line for solid-state batteries, with a design capacity of 0.2 GWh and plans for mass production [8] - The solid-state battery industry is anticipated to accelerate its industrialization process in the next 2-3 years, with key material and production technology advancements [8] - Companies involved in solid-state battery production are expected to benefit from expanding application spaces [8]

Investment Rating - The report maintains a "Recommendation" rating for the automotive industry, indicating a positive outlook for the sector [5]. Core Insights - The automotive industry experienced an overall increase of 2.7% from May 11 to May 17, with significant growth in production and sales, marking the first time that cumulative production and sales exceeded 10 million vehicles in the first four months of the year [1][23]. - The introduction of mandatory national standards for automatic emergency braking systems (AEBS) is set to accelerate the adoption of this technology in the Chinese market [33]. - Key companies such as BYD, Geely, and others are highlighted for their strong sales performance and potential for future growth [3][29]. Market Performance Overview - The automotive sector's performance was notably strong, with the passenger vehicle and auto parts segments leading the gains, increasing by 4.4% and 2.2% respectively [11]. - Individual stocks within the automotive sector showed significant volatility, with notable gainers including Chengfei Integration (+61.1%) and Zhaofeng Co. (+34.8%), while some stocks like Suoao Sensor (-9.0%) faced declines [15][19]. Industry Dynamics - The report highlights several key developments, including the establishment of BYD's European headquarters in Hungary, which aims to enhance local operations and create thousands of jobs [29]. - The collaboration between Huawei and UBTECH in the robotics field is expected to drive innovation in humanoid robots for various applications [24]. - The report also notes the successful launch of new models such as Geely's Galaxy Star 8, which achieved over 10,000 pre-orders within six days of its release [30]. Investment Recommendations - The report recommends focusing on companies with strong sales performance or potential blockbuster vehicles, such as BYD, Seres, Great Wall Motors, and JAC Motors [3]. - For commercial vehicles, it suggests investing in Yutong Bus, China National Heavy Duty Truck, and Weichai Power [3]. - In the auto parts sector, companies with cost and product advantages like Fuyao Glass and Top Group are highlighted as key investment opportunities [3].

Market Overview - The report indicates that the easing of tariff risks between China and the US has not changed the market's oscillating pattern, with the primary concern being economic expectations [4][5][15]. - Economic data for April shows signs of weakening, with external demand expectations declining and internal demand needing support [4][15]. Industry Configuration - The report highlights that the configuration value of the banking and insurance sectors has further increased, with a recommendation for a balanced investment strategy leaning towards these sectors [6][38]. - The automotive sector is experiencing a strong internal demand but weak external demand, leading to a "strong but not strong, weak but not weak" market condition [21][24]. Automotive Industry Insights - The Ministry of Industry and Information Technology has proposed new regulations requiring all passenger vehicles to be equipped with automatic emergency braking systems, positively impacting the automotive parts and passenger vehicle sectors [21][22]. - The automotive index is expected to maintain a range-bound pattern, with upward resistance and downward support due to the current economic conditions [21][24]. - As of May 16, the automotive sector index has risen to 7179.8 points, nearing the upper limit of its historical range, indicating a decrease in configuration value as it approaches previous highs [24]. Public Fund Regulations - New public fund regulations are expected to impose stricter constraints on performance benchmarks, which may lead to significant shifts in market behavior, particularly affecting equity funds [25][27]. - The report notes that the current allocation in the bond market is significantly lower than its benchmark, while the equity market allocation exceeds its benchmark [25][27].

Core Viewpoint - The Ministry of Industry and Information Technology has released a draft for public consultation regarding the technical requirements and testing methods for Advanced Emergency Braking Systems (AEBS) in light vehicles, with a deadline for feedback set for June 30, 2025 [2] Group 1: Technical Requirements - The AEBS draft will replace the existing GB/T39901—2021 standard and is applicable to M1 and N1 category vehicles [7] - M1 vehicles must activate the system when a collision risk is detected at speeds between 10 km/h and 80 km/h, while N1 vehicles must do so at speeds between 10 km/h and 60 km/h [8] - The system must also activate when a collision risk with vulnerable road users, such as pedestrians and cyclists, is detected at speeds between 20 km/h and 60 km/h [8] Group 2: Implementation and Impact - The new standard is expected to be implemented on January 1, 2028, and aligns with international regulations (UN-R152), enhancing the competitiveness of Chinese automotive products in the global market [8] - Research indicates that AEBS can significantly reduce accident rates, particularly in low-speed and urban environments, thereby improving overall road safety [9] - The new standard provides unified technical specifications for manufacturers, which will help reduce technical discrepancies and quality variations in the market [9]

Core Viewpoint - The new standard for Advanced Emergency Braking System (AEBS) in China is set to become mandatory, expanding its applicability to a wider range of vehicles, including light trucks and previously unregulated models, indicating a significant shift in automotive safety regulations [1][3]. Group 1: Standard Implementation - The new standard will replace the existing voluntary standard GB/T 39901-2021 and will apply to M1 passenger cars and N1 light trucks, making AEBS a basic requirement for light vehicles [1][2]. - The scope of the new standard has been broadened to include previously unregulated vehicle types such as pickups and micro trucks, increasing the number of affected vehicle manufacturers and models [1][2]. Group 2: Technical Requirements - The new standard imposes higher performance requirements, particularly in responding to vulnerable road users, mandating that the system must recognize and react to pedestrians, bicycles, and motorcycles within a speed range of 20 to 60 km/h [1][2]. - Testing methods have been significantly expanded to include complex traffic scenarios, with a requirement for a 90% pass rate on certain tests, reflecting a shift towards ensuring systems are stable, reliable, and controllable [2]. Group 3: System Operation and Compliance - The AEBS must be enabled by default each time the vehicle is started, and cannot be manually disabled once the vehicle exceeds 10 km/h, ensuring continuous operation [2]. - Manufacturers are required to comply with the new technical standards for new models immediately upon implementation, while existing models must adapt within 12 to 24 months, providing a transitional period for compliance [2][3]. Group 4: Industry Impact - The transition from a recommended to a mandatory standard will necessitate systemic adjustments in cost structures, R&D processes, and vehicle compatibility for manufacturers, particularly in the mid to low-end market [3]. - The demand for components from L2 level active safety supply chain companies, such as sensors, controllers, and braking systems, is expected to increase significantly as a result of the new requirements [3].

Group 1 - Toyota announced the debut of its new pure electric vehicle, the bZ Woodland, at the TMNA event from May 19 to 21, with plans for a North American launch in early 2026 [1] - A new mandatory national standard for light vehicle automatic emergency braking systems (AEBS) has been drafted, expanding its applicability and requiring all passenger cars to be equipped with AEBS by June 30, 2025 [2] - Changan Automobile's new energy vehicle production base in Rayong, Thailand, has officially commenced operations, marking the first overseas production base for the company and representing a significant investment of 8.8 billion Thai Baht [3] Group 2 - The 2027 Audi Q9 has been spotted during road tests, showcasing its design features such as a large grille and split headlight design, indicating a focus on aesthetics and functionality [4][3]

Core Viewpoint - The automotive industry is focusing on improving vehicle safety, particularly through the implementation of new regulations for Automatic Emergency Braking Systems (AEBS) in light vehicles [1][2]. Group 1: New Regulations - A new mandatory national standard for AEBS has been drafted, requiring M1 and N1 class vehicles to be equipped with this system [1][2]. - The AEBS includes two main functions: Forward Collision Warning (FCW) and Automatic Emergency Braking (AEB), aimed at reducing the likelihood of collisions with vehicles or pedestrians [1]. Group 2: Technical Requirements - For M1 vehicles, the AEBS must be active at speeds between 10 km/h and 80 km/h under all load conditions, while for N1 vehicles, the active speed range is 10 km/h to 60 km/h [2]. - The system must also activate when detecting potential collisions with pedestrians, bicycles, and two-wheeled vehicles at speeds between 20 km/h and 60 km/h [2]. Group 3: Market Impact - Following the announcement of the new regulations, stocks in the automotive parts sector surged, with companies like Jingsheng Electronics and Spring Precision Engineering hitting their daily limits [3]. - The discussion around AEB technology has intensified due to recent accidents involving smart connected vehicles, raising concerns about the effectiveness and reliability of AEB systems [3][4]. Group 4: Industry Debate - There is ongoing debate within the industry regarding the effectiveness of AEB systems, with some executives questioning the reliability of current AEB functionalities and their marketing claims [4]. - Specific incidents, such as the Xiaomi SU7 collision, have highlighted the limitations of AEB systems, particularly in recognizing certain obstacles [4].