According to the Smart Finance APP, Ping An Securities has released a Research Report stating that the internal demand for autos will be an important focus of consumer stimulation policies in 2025, with the expectation that the increase in domestic auto sales in 2025 will surpass that of 2024. The trend of expanding range extender vehicles has been established, and technological iterations (higher pure electric range, ultra-fast charging, and improvements in low-temperature performance) along with cost advantages will allow for several times expansion space for range extender vehicles in the medium to long term. Range extenders are an important power form for mid-to-high-end Electric Vehicles, and it is anticipated that sales of range extender vehicles will reach around 2.2 million units in 2025, a year-on-year increase of 80%, with long-term potential expected to reach 7.5 million units. Current major players in range extenders like Aion and Li Auto will enjoy the dividends of this expansion.

In the era of AI Intelligent Driving 1.0, a battle for experience and scale is underway. The release of end-to-end intelligent driving features from parking spot to parking spot will be a critical test for intelligent driving experience in 2025. Adaptability, mileage takeover, and personification level are the three dimensions for measuring AI intelligent driving experience. The higher the ownership of advanced intelligent vehicles and the more "live water" in the data pool, the faster the iteration of intelligent driving. Reducing the cost of intelligent driving Hardware, lowering the price range of equipped vehicle models, and making advanced intelligent driving a standard configuration are three means to increase ownership. It is expected that the cost of intelligent driving Hardware will be halved in two years, and it is necessary for new cars priced above 0.2 million to be equipped with advanced intelligent driving. Overall assessment indicates that currently Huawei ADS, Li Auto, and Xiaopeng are at the forefront of the Industry, while traditional automakers ZEEKR and Great Wall Motor are also accelerating their follow-up.

Meeting the challenges of export uncertainties with "Industry Going Global". Major auto export destination countries have increased trade barriers against China's auto exports, bringing more uncertainties for auto exports in 2025. However, regions such as Latin America, Southeast Asia, Australia and New Zealand, and the Middle East and Africa have relatively friendly environments for auto exports, and short-term increments in China's auto exports may mainly come from these regions. In the long term, going global is an inevitable path for China's auto Industry globalization, with market share acquired through localized operations being of higher quality and stronger resistance to risks.

Investment recommendations: Maintain a "stronger than the market" rating for the Industry. In 2025, the expansion and iteration of range extender vehicles in the auto industry will resonate, AI intelligent driving will accelerate its iteration, and auto exports will transition towards Industry going global. Recommended stocks include Chongqing Sokon Industry Group Stock (601127.SH), Li Auto (09868), Xiaopeng Motors (09868), Geely Automobile (00175), and focus on LEAPMOTOR (09863) and Xiaomi Group (01810). Recommended intelligent supply chain companies include Huizhou Desay SV Automotive (002920.SZ), and suggest paying attention to Siasun Robot&Automation (09660). Recommended leading players with experience in "Industry Going Global" include Great Wall Motor (601633.SH) and FUYAO GLASS (600660.SH), which continues to maintain strong pricing power in the Industry Chain.

Risk warnings: Weak auto consumer demand; policy support may not meet expectations; price wars in the auto industry may continue; trade barriers are increasing, leading to heightened uncertainties in auto exports; progress in intelligent driving may not meet expectations; the estimates of range extender vehicle market potential in this report are based on the current market landscape and publicly available information, but there may be unforeseen uncertainties in the future development of range extender vehicles that could lead to discrepancies between actual development and the estimates presented in the report.