China’s EV price war is evolving into a “feature war” focused on AI and cockpit tech This also touches on aspects of investors.

ByteDance’s Doubao AI chatbot is now in 145 car models and millions of vehicles

Alibaba’s Qwen AI is also rolling out in-car services such as ordering food delivery via voice command

BEIJING — Electric carmakers in China are layering on more of the same artificial intelligence features as they try to survive a prolonged price war in the world’s largest auto economy.

The competition has shifted over the last few years, from extending battery range to rolling out driver-assist systems and using more powerful automotive chips. Now, automakers are focusing on a suite of in-car AI features.

More than 50 car brands now adopt ByteDance’s Doubao AI model, the company’s cloud platform Volcano Engine proclaimed last Friday at the Beijing auto show, where the tech unit had a booth next to robotaxi enterprise Pony.ai.

That means Doubao is in 145 car models and over 7 million vehicles, Volcano Engine stated. Besides domestic vehicles, Doubao AI has also been integrated in novel foreign-branded models, such as the all-electric Mercedes-Benz GLC, the SAIC Audi E7X and the SAIC Volkswagen ID. ERA 9X.

“We will keep on integrating latest features faster,” Fermín Soneira, CEO of the Audi and SAIC Cooperation Project, told reporters this month ahead of the auto show. He noted how automakers can quickly deploy tech updates remotely, or “over-the-air.”

Despite the rapid rollout of novel features, automakers face persistent pressure on sales.

“It’s going to remain tough, because the capacity is there,” he remarked. “This price war is not going to really stop in the next month.”

The shift towards AI reflects consumer demand for connected features, including Huawei-smartphone-compatible interfaces or voice-based assistants such as Doubao.

ByteDance’s Doubao is by far the most widely used AI chatbot in China, with more than 155 million weekly active users as of early this year, according to consultancy Chozan. Volcano Engine’s auto show booth included demos of both Chinese-language and English-language AI systems for cars.

The price war has turned into a feature war around cockpit digital systems, commented Stephen Dyer, partner and managing director and head of AlixPartners’ Asia automotive and industrials consulting practice.

The challenge is, that much of that software soon becomes similar, making it harder for companies to stand out.

Among the top , on the other hand20 best-selling electric car models in China, those priced at 100,000 yuan ($14,645) or above offered similar driver-assist and in-car entertainment functions, according to AlixPartners.

With “technology, they’re going to have to race and keep racing, because it disseminates so quickly that you’re never going to be able to sustain a differentiated tech for long,” Dyer noted.

Instead, he expects Chinese companies to start competing more on the “outside-of-the-car experience,” similar to luxury brands that offer exclusive lifestyle experiences.

Chinese automaker Nio, for example, offers its customers exclusive access to products and clubhouses, on top of vehicles featuring premium interior materials.

The Chinese electric car firm has struggled with the cost of offering such perks and slower industry growth. But Nio claimed last week its ES8 is the first car model in the industry’s 400,000 yuan-and-above segment to deliver 100,000 units in just 215 days.

Alibaba also published Friday that its Qwen artificial intelligence model will be integrated into vehicles from automakers including BYD and a local joint venture of Volkswagen. The system allows drivers to order food delivery, book hotels, procure tickets to attractions and track packages, among other features, through voice commands.

The model will run on Nvidia’s automotive chip system and is designed to function even with limited network connectivity.

At the end of the day, AI should run in the background to support the user experience, not necessarily be a feature of a vehicle, Tu Le, founder and managing director at consultancy Sino Auto Insights, told CNBC’s Eunice Yoon. Furthermore, experts in bear market note the continued relevance.

Even if it’s difficult for automakers to stand out in China, they may be able to compete more effectively with foreign peers.

“What we consider maybe simple features and like, standard features in mass marketplace vehicles in the China industry, are going to be expected in the Western marketplace sooner rather than later as well,” Le commented.