U.S. chip giant Nvidia is finding success in China by riding the country's EV boom

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A motion is posted successful beforehand of the Nvidia office connected May 10, 2018 successful Santa Clara, California.

Justin Sullivan | Getty Images

Several Chinese electrical carmakers are turning to U.S. spot elephantine Nvidia to powerfulness their semi-autonomous driving systems, arsenic they ramp up contention with Tesla successful the world's largest car market.

Chinese start-ups Xpeng and Nio are utilizing the Nvidia Drive Orin spot successful their latest cars. Baidu, which past twelvemonth launched an car portion called Jidu, announced plans to usage the aforesaid Nvidia spot successful its upcoming car, arsenic good arsenic Polestar, a marque nether Chinese car elephantine Geely.

With this chipset and accompanying bundle platform, Nvidia promises the capabilities for afloat autonomous driving.

"For a Chinese EV company, oregon globally, determination is not overmuch to lucifer what Nvidia tin offer," said Bevin Jacob, spouse astatine Shanghai-based concern and consulting steadfast Automobility.

However, these Chinese carmakers are not putting retired afloat autonomous cars. Instead, they are focusing connected alleged advanced driver-assistance system, oregon ADAS. These are systems that let the car to transportation retired immoderate functions semi-autonomously, specified arsenic lane switching. For example, Tesla's ADAS is called Autopilot portion Xpeng's strategy is Xpilot.

ADAS — on with different features similar accelerated charging and scope — are "key differentiators" successful the high-end electrical conveyance space, according to Aakash Arora, managing manager and spouse astatine Boston Consulting Group.

"Most EV models contiguous vie successful terms segments wherever having ADAS is captious from a lawsuit anticipation perspective," Arora said. "Early adopters of EVs are besides apt aboriginal exertion adopters and worth exertion features more."

Tesla contention successful China

Read much astir electrical vehicles from CNBC Pro

While Tesla is investing successful spot design, that's not realistic for each EV companies, peculiarly start-ups that are focused connected ramping up accumulation and getting cars into the hands of customers.

That's wherefore they're turning to Nvidia for chips to powerfulness ADAS features to rival Tesla.

"Tesla has a wide and definable pb astir FSD with Chinese EV players present aggressively partnering with Nvidia to adjacent this perceived exertion gap," Daniel Ives, managing manager astatine Wedbush Securities, told CNBC by email.

"Nvidia has beardown roots successful the China marketplace and further gathering retired its car spot concern astir FSD is strategically important."