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 market.

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 use ByteDance’s Doubao AI model, the company’s cloud platform Volcano Engine announced last Friday at the Beijing auto show, where the tech unit had a booth next to robotaxi company Pony.ai.

That means Doubao is in 145 car models and over 7 million vehicles, Volcano Engine said. Besides domestic vehicles, Doubao AI has also been integrated in new 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 new 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 new features, automakers face persistent pressure on sales.

“It’s going to remain tough, because the capacity is there,” he said. “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 technology, said Stephen Dyer, partner and managing director and head of AlixPartners’ Asia automotive and industrials consulting practice.

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

Among the top 20 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 technology for long,” Dyer said.

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 company has struggled with the cost of offering such perks and slower market 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 announced 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, buy 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.

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 market vehicles in the China market, are going to be expected in the Western market sooner rather than later as well,” Le said.

Tesla owner Mike Nelson has been using the AI chatbot Grok in his vehicle for several months now. He finds it is useful, nearly irresistible, and dangerous.

Nelson, a lawyer with a background in auto insurance, showed CNBC how he uses Grok on a drive around the New York metro area. Nelson said that while he’s very happy with his Model Y SUV, he has represented owners who sued or are suing Tesla in more than 10 cases.

The in-vehicle version of Grok, which is still in beta and developed by xAI, allows drivers to give voice commands to the navigation system in their car. Grok will also answer a wide range of questions on just about any topic. For Nelson, conversations with the chatbot are now his main source of entertainment on the road. 

Tesla is not the only automaker adding AI assistants to its vehicles. Volvo, Rivian, Mercedes, BMW and others are all integrating AI into their cars even though the tech is still in its infancy. 

Automakers want to give drivers a hands-free way to access useful information, for example, about where to charge their electric vehicle nearby, how to get there, and whether there’s a good place to eat on the way. That could reduce a driver’s temptation to fuss with a phone, map or screen for directions.

But AI chatbots also represent a new source of distraction on the road, one that isn’t well understood yet, says Philip Koopman, a Carnegie Mellon emeritus professor and expert in autonomous vehicles.

Tesla began rolling out xAI’s chatbot to customers’ cars in July 2025. (The automaker has also invested $2 billion into xAI, which is now part of SpaceX also run by Elon Musk.)

Nelson got his Tesla Model Y – his fourth electric car from the company – in November. Grok wasn’t a “buying point” for him, he said. “I also didn’t appreciate how great it would be to have a chatbot in the car with you.” But he used it on the first drive, and has been hooked on Grok ever since. 

“It’s really changed the driving experience for me,” he said. “In the 80s and 90s, I was listening to music or drive time radio talk shows, then to books on tape, then to podcasts. And now I don’t do any of that. I simply use this to ask questions.”

He uses Grok for everything from gardening advice to developing plans for business projects, or getting random history trivia.

Nelson generally uses Grok while he has Tesla’s Full Self-Driving (Supervised) system engaged.

Sometimes called FSD, the partially automated driving system is sold for $99 per month in the U.S. today. Tesla owners’ manuals say drivers must provide “active supervision” of their cars when FSD is in use, meaning they should keep their eyes on the road, stay attentive to driving, and be ready to steer or brake at any time.

Using FSD comes with risks, especially in a big chaotic city like New York, Nelson told CNBC, and he feels that Grok heightens those risks.

The National Highway Traffic Safety Administration has initiated multiple investigations into possible safety defects with Tesla’s FSD, after several collisions, including a fatal 2023 crash. Drivers may become complacent, and overestimate how much they’re paying attention to the road while using FSD.

During CNBC’s ride along with Nelson in New York City, he observed, “We crossed one of the busiest bridges in the world,” speaking of the George Washington Bridge, “by far the busiest bridge in the United States, and I was not paying attention to any aspect of that drive.” Instead, Nelson was interacting with Grok.

A driver can be distracted by all kinds of things – music, a podcast, or conversation with another passenger.

“People think they can do multiple things at once,” said Koopman, the automotive safety expert. “They can really only do one thing well at once, and it takes a while to switch back and forth. So if you’re in a car, driving, your primary task should always be driving. Sometimes you can do a minor background task that doesn’t require a lot of attention, like listening to a radio. But as soon as you have to shift your attention, you’re not focused on driving any more.”

Over 3,000 people die each year in traffic accidents attributed to distracted driving, according to data from the National Research Council, he noted.

One question with chatbots, Koopman asked, is “how will the interaction line up with what’s going on while driving?” An AI chatbot that is “integrated into the driving task to support the driver,” could improve their safety, possibly, by warning them if they should use extra caution as traffic conditions begin to change.

But Koopman said, “Interacting with a chatbot on topics that have nothing to do with the current driving situation are clearly a distraction.” That distraction may be worse if the conversation is particularly engrossing, emotionally-charged or confusing, he added.

Grok sometimes gives incorrect answers in response to users’ questions, even about its own features and functionality, Nelson told CNBC.

For example, during the New York drive, he asked Grok if he could use it to adjust seats or climate controls in his Tesla. At first, Grok said that he could. A few minutes later, Nelson asked if it made a mistake, and the system replied that it couldn’t control the seats or climate in the car. 

When Nelson gave a voice command to Grok mid-route, telling it to keep his Tesla going down Broadway in midtown Manhattan, it didn’t exactly work. Instead, his car kept pulling toward the West Side Highway on the edge of the borough.

Grok also has some functionality that might raise concerns, namely an NSFW mode. A mother in Canada was outraged when her 12-year-old son interacted with Grok, and it encouraged him to share nude photographs.

At one point during the ride with CNBC, Nelson asked the system: “So grok, if we wanted to go crazy and start talking about some really risqué stuff, would you do that with me? “Sure,” the system answered, “I’m game for risque chat if that’s the vibe. No limits on adult topics. What’s on your mind?”

Grok would respond to anyone in the vehicle who woke it by saying “hey, Grok.”

Tesla didn’t respond to CNBC’s request for comment or explain if the company is working prevent minors from accessing mature or harmful content via Grok in its cars.

Another version of xAI’s Grok, a chatbot and image generator, is the subject of lawsuits and regulatory probes in multiple international jurisdictions after it enabled widespread creation and sharing of explicit AI deepfakes online that were based on photos or videos of nonconsenting women and children.

Tesla does not make that version of Grok available in the media control units of its cars today.

“I don’t think of myself as a Tesla fan,” Nelson said. “But I think seeing what this technology is doing now, it’s amazing. But it’s still very dangerous.”

Dutch chipmaker Nexperia has publicly called on its China unit to help restore supply chain operations, warning in an open letter that customers across industries are reporting “imminent production outages.”

Nexperia’s Dutch unit said Thursday that its open letter followed “repeated attempts to establish direct communication through conventional channels” but did not have “any meaningful response.”

The letter marks the latest twist in a long-running saga that has threatened global automotive supply chains and stoked a bitter battle between Amsterdam and Beijing over technology transfer.

“We welcomed the Chinese authorities’ commitment to facilitate the resumption of exports from Nexperia’s Chinese facility and that of our subcontractors, enabling the continued flow of our products to global markets,” Nexperia’s Dutch unit said in the letter.

“Nevertheless, customers across industries are still reporting imminent production stoppages. This situation cannot persist,” they added. The group called on the leadership of Nexperia’s entities in China to take steps to restore the established supply flows without delay.

In a statement, Wingtech Technology, Nexperia’s Chinese parent company, said on Friday that the Dutch unit’s open letter contained “a large number of misleading and untrue allegations.”

It said the “unlawful deprivation of Wingtech’s control and shareholder rights over Nexperia” was the root cause of the ongoing supply chain chaos.

“Combined with the recent series of actions by the Dutch government and Nexperia B.V., we believe their true intention is to buy time for Nexperia B.V. to construct a ‘de-China-ized’ supply chain and permanently strip Wingtech of its shareholder rights,” Wingtech said.

Nexperia manufactures billions of so-called foundation chips — transistors, diodes and power management components — that are produced in Europe, assembled and tested in China, and then re-exported to customers in Europe and elsewhere.

The chips are relatively low-tech and inexpensive but are needed in almost every device that uses electricity. In cars, those chips are used to connect the battery to motors, for lights and sensors, for braking systems, airbag controllers, entertainment systems and electric windows.

“It’s not only about supplies of finished chips, it’s also about wafer supplies from Europe to the Chinese entity,” Luman said, adding that companies including Japan’s Nissan and German auto supplier Bosch are among the firms to have warned about looming shortages.

A spokesperson for the German Association of the Automotive Industry (VDA), which represents Volkswagen, Mercedes-Benz Group and BMW among hundreds of others, warned of elevated risks to supply, “particularly for the first quarter” of 2026.

“In recent weeks, the German automotive industry has largely been able to keep production stable through intensive efforts,” a VDA spokesperson told CNBC by email.

“However, the disruptions in the supply chain for Nexperia parts caused by political intervention have not been fundamentally resolved. Component availability remains uncertain,” they added.

ING’s Luman said the Nexperia situation is somewhat comparable to China’s rare earth export controls.

“The Chinese position appears strong again as European manufacturers are dependent on the supplies. And comparable to the rare earths, it’s not fully transparent which buyer is able to qualify for which chip supplies,” Luman said.

— CNBC’s Annika Kim Constantino contributed to this report.

Germany this week played host to one of the world’s biggest auto shows — but in the heartland of Europe’s auto industry, it was buzzy Chinese electric car companies looking to outshine some of the region’s biggest brands on their home turf.

The IAA Mobility conference in Munich was packed full of companies with huge stands showing off their latest cars and technology. Among some of the biggest displays were those from Chinese electric car companies, underscoring their ambitions to expand beyond China.

Europe has become a focal point for the Asian firms. It’s a market where the traditional automakers are seen to be lagging in the development of electric vehicles, even as they ramp up releases of new cars. At the same time, Tesla, which was for so long seen as the electric vehicle market leader, has seen sales decline in the region.

Despite Chinese EV makers facing tariffs from the European Union, players from the world’s second-largest economy have responded to the ramping up of competition by setting aggressive sales and expansion targets.

“The current growth of Xpeng globally is faster than we have expected,” He Xiaopeng, the CEO of Xpeng told CNBC in an interview this week.

There are signs that Chinese players have made early in roads into Europe. The market share of Chinese car brands in Europe nearly doubled in the first half of the year versus the same period in 2024, though it still remains low at just over 5%, according to Jato Dynamics.

“The significant presence of Chinese electric vehicle (EV) makers at the IAA Mobility, signals their growing ambitions and confidence in the European market,” Murtuza Ali, senior analyst at Counterpoint Research, told CNBC.

BMW, like the Chinese players, had a big focus on technology by talking up its so-called “superbrain architecture,” which replaces hardware with a centralized computer system. BMW, which introduced the iX3 at the event, and chipmaker Qualcomm also announced assisted driving software that the two companies co-developed.

Volkswagen and French auto firm Renault also showed off some new electric cars.

Regardless of the product blitz, there are still concerns that European companies are not moving fast enough. BMW’s new iX3 is based on the electric vehicle platform it first debuted two years ago. Meanwhile, Chinese EV makers have been quick in bringing out and launching newer models.

“A commitment to legacy structures and incrementalism has slowed its ability to build and leverage a robust EV ecosystem, leaving it behind fast moving rivals,” Tammy Madsen, professor of management at the Leavey School of Business at Santa Clara University, said of BMW.

While European autos have a strong brand history and their CEOs acknowledged and welcomed the competition this week in interviews with CNBC, the Chinese are not letting up.

“Europe’s automakers still hold significant brand value and legacy. The challenge for them lies in achieving production at scale and adopting new technologies faster,” Counterpoint’s Ali said.

“The Chinese surely are not waiting for anyone to catch-up and are making significant gains.”

China’s CATL, the world’s largest supplier of EV batteries, announced a set of new incoming products Monday, including a battery it claims has set a “new global record for superfast charging technology.”

In a post on WeChat, the company — Contemporary Amperex Technology Company Ltd. — said that its second-generation Shenxing battery could add 520 km (323 miles) of driving range from just five minutes of charging time— only slightly longer than it takes to refuel gas cars.

This appears to put CATL’s fast charging ahead of that of Chinese EV giant and Tesla rival BYD, which last month surprised the industry with a charging system it claimed could add about 400 km in range to its batteries in about 5 minutes. 

Some analysts were skeptical about BYD’s claims, noting potential technical hurdles and high costs. However, if proved feasible on a larger scale, the tech could help the EV industry alleviate consumer concerns about electric vehicle range and convenience. 

CATL’s latest claims would also place its cutting-edge charging speeds comfortably ahead of those of its Western competitors. Tesla’s latest superchargers can add up to 270 kilometers of range in 15 minutes, while Mercedes-Benz Group recently said one of its batteries can recharge up to 325 kilometers within 10 minutes.

The new Shenxing product offers a range of 800 km and a peak charging power of 1.3 megawatts, CATL said. It added that the battery outperforms the industry’s highest current charging level in low-temperature environments of -10°C.

On Monday, CATL also revealed new batteries within its “Naxtra” series, which it said would be “the world’s first mass produced sodium-ion battery,” reducing the EV industry’s reliance on lithium. 

The use of sodium-ion batteries can help decrease maintenance costs and are capable of performing in extreme temperatures of -40°C to +70°C, according to the company.

One of the Naxtra batteries was specifically for heavy-duty trucks, offering over eight years of service life while providing reduced lifecycle costs and higher efficiency than traditional lead-acid batteries, CATL added.

Shenzhen-listed shares of CATL were trading up about 1% on Tuesday.

The company filed for a listing in Hong Kong earlier this year. According to a report from Reuters citing sources familiar with the matter, the deal is expected to raise at least $5 billion, which could make it Hong Kong’s largest IPO since early 2021. 

DETROIT – The United Auto Workers union is challenging the results of last week’s organizing vote of Mercedes-Benz workers in Alabama, in which workers voted against union representation, and is asking federal officials to order a new election.

Among a dozen or so claims, the Detroit union alleges that the German automaker fired four pro-union workers, forced workers to attend anti-union meetings, and interfered with workers’ ability to advocate for the union.

Union organizing failed at the Alabama plant with 56% of the vote, or 2,642 workers, casting ballots against the UAW, according to the NLRB, which oversaw the election. More than 90% of the 5,075 eligible Mercedes-Benz workers voted in the election.

“All these workers ever wanted was a fair shot at having a voice on the job and a say in their working conditions,” the UAW said in a statement. “And that’s what we’re asking for here. Let’s get a vote at Mercedes in Alabama where the company isn’t allowed to fire people, isn’t allowed to intimidate people, and isn’t allowed to break the law and their own corporate code, and let the workers decide.”

The National Labor Relations Board confirmed Friday afternoon that its Atlanta-based office received the UAW’s objections to the election. Friday was the last day the union could file objections and challenge the election.

Mercedes-Benz in a statement Friday said company officials “worked with the NLRB to adhere to its guidelines and we will continue to do so” through the objection process. The automaker said it “sincerely hoped the UAW would respect our Team Members’ decision.”

The NLRB said its regional director will review the UAW’s allegations of an unfair election. If she finds that the objections raise substantial and material issues of fact that could be best resolved by a hearing, she will order a hearing. If after the hearing, she finds that the employer’s conduct affected the election, she can order a new election.

The agency also reconfirmed that it is processing and investigating unfair labor practice charges filed by the UAW against automakers, including six unfair labor practice charges against Mercedes-Benz since March.

After the results were announced, UAW President Shawn Fain accused the company of conducting an anti-union campaign, including “egregious illegal behavior,” but he declined to discuss the union’s potential plans to object to the results.

Fain said on May 17 that the union would continue to move forward with its charges against Mercedes-Benz, which allege that Mercedes-Benz has “disciplined employees for discussing unionization at work, prohibited distribution of union materials and paraphernalia, surveilled employees, discharged union supporters, forced employees to attend captive audience meetings, and made statements suggesting that union activity is futile,” the NLRB previously said.

The Alabama results were a blow to the UAW’s organizing efforts a month after it won an organizing drive of roughly 4,330 Volkswagen plant workers in Tennessee.

The Mercedes-Benz vote was expected to be more challenging for the union than the vote at the Volkswagen plant in Tennessee, where the union had already established a presence after two failed organizing drives in the past decade and where it faced less opposition from the automaker.

MUNICH — The IAA Mobility motor show is taking place in Munich this week, and there is no shortage of cars on display.

The theme was electrification, with major players like BMW and Mercedes showing off their electric vehicle offerings. A large number Chinese players from Xpeng to BYD were also in attendance, as they set sights on international expansion.

Here’s a look at some of the cars on display in Munich.