GUANGZHOU, China – Chinese electric car maker Xpeng Motors plans to manufacture its own semiconductors for autonomous driving to stay ahead of the competition, a company executive told CNBC.

The comments come after technology news website 36Kr reports that Xpeng has put together a small team to develop semiconductors.

Xinzhou Wu, vice president of autonomous driving at Xpeng, said the company is exploring various technologies, including autonomous driving chips.

“Well, I can’t say enough about that … competition in the Chinese market is fierce … so let’s examine all options. What are the best ways to keep our competitive edge? So far we’re doing very well in.” Software, “Wu told CNBC on Wednesday.

“But in the future we will examine all possible options: How can we hold out … win this competition?”

When asked if that includes exploring internal chipsets, Wu said, “That’s one of the directions, yes.”

Wu did not give any further details.

Xpeng launched a new electric sedan called the P5 on Wednesday. The vehicle is equipped with lidar or light detection and distance measurement technology, which uses lasers to map the surroundings of the vehicle.

This is important to enable some of the P5’s built-in autonomous driving functions.

Currently the P5 uses chips from Nvidia for autonomous driving and Qualcomm for its digital cockpit in the car.

Xpeng Motors will unveil the P5 sedan on April 14, 2021 at an event in Guangzhou, China. The P5 is the third series model from Xpeng and has what is known as Lidar technology.

Arjun Kharpal | CNBC

By designing its own semiconductors, Xpeng could better control the integration between hardware and software.

The company has focused on developing technology in-house to differentiate itself from competitors in the crowded Chinese electric vehicle market. Not only does Xpeng compete with traditional automakers and startups, but more and more tech companies like Baidu and Xiaomi have jumped into the fray as well.

Wu claimed the P5’s hardware and software and “the ease of use of its overall features are much more advanced” than its competitors – and that this would give the company an “edge”.

Chinese technology companies are increasingly concentrating on developing their own semiconductors. Baidu raised money for its chip business last month and Xiaomi unveiled a new chipset for the camera on its latest flagship smartphone.