Analysts said the move would force other competitors to grow faster to survive.
Chinese autonomous driving technology developer DeepRoute.ai has raised USD 100 million from an automaker, the company said on Monday, as it looks to bolster mass adoption of its systems on vehicles ahead of Tesla in China.

The Shenzhen-based startup expects nearly 200,000 cars to be equipped with its advanced assisted driving system on Chinese roads by the end of 2025, CEO Maxwell Zhou told Reuters in an interview, up from about 20,000 now.

The system can navigate urban traffic similar to Tesla's Full Self-Driving (FSD), which the U.S. automaker expects to launch in China in coming months.

DeepRoute.ai plans to launch more than 10 models with its automaker clients in 2025, Zhou said. The first model equipped with its system launched in August and two more models, including one under the smart brand co-owned by Geely and Mercedes-Benz, will be delivered to consumers this year, he said.

The growing fleet will generate revenue for the company via a technology licensing fee per car and collect data that is key for its artificial intelligence technology to evolve faster to handle more complicated traffic situations, Zhou said.

DeepRoute.ai's existing backers include e-commerce giant Alibaba and the sole investor in this fundraising round is a Chinese automaker that the company declined to name. It also did not disclose the valuation of the company after the fundraising.

Automakers have been competing to provide more advanced autonomous driving features as a selling point to lure Chinese consumers as a brutal price war extends among hundreds of models in the world's largest auto market.

Interest in this area was further spurred this year after Tesla CEO Elon Musk said the U.S. automaker planned to introduce its FSD system in China, its second-largest market. Analysts said the move would force other competitors to grow faster to survive.

Zhou said he saw Tesla as a pioneer in bringing advanced learning technology to autonomous driving, but added it would need to adapt to the local market in China.

"China has more complicated traffic situations with pedestrians walking on motorways and millions of scooters rushing to deliver their goods," he said.

Zhou said his team was also keeping an eye on opportunities overseas such as in Europe, Southeast Asia and the Middle East, anticipating demand for advanced autonomous driving technologies could emerge in 2027 and 2028.

DeepRoute.ai, founded in 2019, started developing its autonomous driving system without using expensive high-definition maps in 2020, while many of its peers and automakers were investing heavily on mapping out the streets and highways.

This has given it a significant edge in costs that Zhou said could help automakers to build a smart EV to be priced as low as 150,000 yuan ( USD 21,063.27) in China.