(Yicai) June 18 -- The race among Chinese smart new energy vehicle makers to develop their own autonomous driving chips may be sowing the seeds of future oversupply, the founder of Leapmotor Technology has warned.

Annual demand for self-driving chips is only about 10 million to 20 million, yet there are already 14 products in the market, Zhu Jiangming, who is also the new energy vehicle marker’s chairman and chief executive, said at a launch event for its updated C-series sport utility vehicle lineup on June 16.

In addition to foreign players such as Qualcomm and Nvidia, Chinese technology giants such as Huawei Technologies and NEV producers like BYD, Nio, Xpeng Group, and Li Auto are also developing autonomous driving chips.

All of Leapmotor's models are equipped with Qualcomm chips, and for now the Hangzhou-based company’s first priority is simply to execute smart NEV development well, Zhu pointed out.

Zhu has said on several occasions this year that Leapmotor’s next three years will be about scaling up. “When we reach a scale similar to that of Toyota Motor, we might then consider whether to develop our own autonomous driving chips,” he said.

Until then, Leapmotor will continue to focus its research and development efforts on core components that can generate value and on building complete vehicle products with higher levels of innovation, Zhu pointed out.

Leapmotor sold 596,600 NEVs last year, 67,000 of which were abroad. Its domestic and overseas sales ranked first among Chinese NEV startups, and it had a net profit of CNY540 million (USD79.8 million), becoming the second NEV startup to become profitable after Li Auto. 

Leapmotor aims to sell one million vehicles this year, including 100,000 to 150,000 overseas, and is targeting an annual profit of CNY5 billion (USD740 million). In the first five months of the year, the firm sold 263,100 NEVs, of which 75,000 were abroad.

Editors: Tang Shihua, Futura Costaglione