Analysis of the Impact of New Data Security Policies on Digital Transformation and Investment Value in the Automotive Industry

Based on the latest policy information and market data I have collected, let me provide you with a comprehensive analysis of the impact of new data security policies in the automotive industry on car companies’ digital transformation and investment value.

According to the latest information, the Ministry of Industry and Information Technology and three other departments jointly issued the “Implementation Plan for Digital Transformation of the Automotive Industry”, establishing three core pillars of the automotive industry data security protection system [1][3]:

• Establish an efficient, convenient and secure cross-border data flow mechanism
  : Provide institutional guarantee for the global operation of car companies
• Strengthen the protection capability of important data outbound
  : Build technical capabilities such as outbound security monitoring, log auditing, and emergency response
• Deepen the application of technologies such as privacy-preserving computation and blockchain
  : Promote the safe and credible circulation of data elements

In June 2025, multiple departments jointly drafted the “Guidelines for the Security of Automotive Data Outbound (2025 Edition) (Draft for Comments)”, marking the entry of the cross-border data flow regulatory framework into the detailed implementation stage [1].

New data security policies will accelerate the digital transformation of car companies from three dimensions:

:

• Promote the transformation of car companies from traditional manufacturing to “software-defined vehicles”
• Standardize data collection and management standards [2]
• Deepen the application of technologies such as privacy-preserving computation and blockchain in automotive data scenarios [3]

:

• Data elements become the core competitiveness of car companies, driving the transformation from “selling cars” to “selling services”
• Value-added services based on user data mining become new growth points
• Car companies need to establish data governance thinking and determine how to collect and use data [1]

:

• Establish and improve data security and network security management systems
• Ensure data traceability and risk controllability
• Cultivate compound talent teams

• Data Classification and Grading
  : Car companies need to establish a sound data classification and grading system to identify important data and core data [5]
• Outbound Security Assessment
  : Cross-border data needs to pass multiple mechanisms such as security assessment, certification, and standard contracts [1]
• Technical Capability Building
  : Need to build capabilities such as outbound security monitoring, log auditing, and emergency response [3]

:

• Significant increase in compliance costs
  : Car companies need to invest funds to build data security infrastructure, hire professional teams, and conduct security assessments
• Possible slowdown in R&D progress
  : Under the compliance framework, the speed of data utilization and innovation may be affected to some extent
• Higher threshold for going global
  : Cross-border data flow regulation increases the complexity of global operation of car companies

:

• The investment enthusiasm in the autonomous driving/assisted driving track has continued to decline from its peak in 2021 (investment amount over 30 billion yuan), with the investment amount in 2024 being 28.5 billion yuan and further dropping to less than 12 billion yuan in 2025 [4]
• Capital is concentrating on head enterprises and projects with clear commercialization, forming a “强者恒强” (the strong get stronger) situation [4]

:

• Data Assetization
  : Data becomes a quantifiable and tradable production factor, creating new value growth points for car companies
• Solidification of Competitive Advantages
  : Car companies with strong data capabilities and compliance systems will gain sustained competitive advantages
• Globalization Capability
  : Car companies with sound cross-border data flow mechanisms will be more competitive in the international market

:
According to industry data, obvious differentiation has emerged in the intelligent driving field:

• Fierce market competition has led some enterprises’ products to be abandoned by mainstream car companies due to low technical efficiency and weak AI capabilities [4]
• Head enterprises are rushing ahead quickly, while mid-to-tail enterprises are accelerating their exit [4]
• Third-party intelligent driving enterprises have shown obvious differentiation: Yuanrong Qixing received an exclusive investment of 100 million US dollars from Great Wall Motors, and Zhuoyu Technology (formerly DJI Automotive) received a strategic investment of over 3.6 billion yuan from FAW Group [4]

:

• Data Security Technology Providers
  : Enterprises focusing on automotive data security will benefit from policy promotion
• Head Car Companies with Sound Compliance Systems
  : Traditional car companies such as BYD and SAIC, as well as new forces such as Xpeng and Li Auto
• Intelligent Driving Technology Enterprises
  : Technology-leading enterprises such as Zhuoyu Technology (formerly DJI Automotive)
• Vehicle-road-cloud Integration Related Enterprises
  : Policy supports the development of vehicle-road-cloud integration, and related infrastructure enterprises will benefit [2]

:

• Increased Survival Pressure for Small and Medium-sized Car Companies
  : The dual pressure of compliance costs and R&D investment will accelerate industry clearance
• Technology Route Elimination Risk
  : The rapid iteration of AI technology intensifies the industry’s update and iteration [4]
• Geopolitical Risk
  : Cross-border data flow faces an increasingly complex international political environment [1]

:

• Opportunities
  : Establishing an efficient, convenient and secure cross-border data flow mechanism provides institutional guarantee for Chinese car companies to go global and reduces compliance uncertainty
• Challenges
  : Need to meet the data compliance requirements of both China and the target market countries, facing the pressure of “dual compliance” [1]

:

• Multinational car companies need to follow China’s data outbound regulations when operating in China, increasing operational complexity
• Need to build localized data storage and processing capabilities
• The demand for data security technology and compliance services has increased significantly

:
Automotive production and sales are typical global industries, relying on global supply chain collaboration and transnational market systems. The global operation of the automotive industry chain will inevitably bring data interaction and integration, which has become an indispensable part of the development of the automotive industry [1].

:

• Cross-border data flow mechanisms will promote transnational technical cooperation
• AI training capability becomes the core competitiveness; Tesla’s AI training capability has reached more than 60,000 H100 equivalent GPUs, and it is expected to reach about 80,000 H100 equivalent GPUs by the end of 2024 [2]
• End-to-end solutions become mainstream, directly outputting execution end instructions from data perception input, skipping prediction and planning decisions [2]

:

• Compliance technology service providers focusing on niche markets
• Local enterprises with specific regional data resources
• Enterprises with accumulation in technologies such as privacy-preserving computation and blockchain

:

• Head car companies have built a strong data moat relying on massive data and sound compliance systems
• Capital is concentrating on head enterprises and projects with clear commercialization, and new entrants face dual pressure of funds and market [4]
• International giants such as Tesla maintain a leading position relying on global data resources and technical accumulation

:

• The Ministry of Industry and Information Technology has deployed key work for 2026, strengthening the identification and protection of important data and core data, and promoting the establishment of cross-border data flow mechanisms in key areas such as automobiles [3]
• The pilot program for access and road passage of intelligent connected vehicles will be accelerated to pave the way for the commercialization of autonomous driving [2]
• Vehicle-road-cloud integration is included in the core application scenarios of the national artificial intelligence strategy [2]

:

• Investment focus shifts from traditional manufacturing capabilities to software and data capabilities
• Car companies’ software-defined vehicle capabilities and data operation capabilities become key evaluation indicators

:

• Cross-border data flow mechanisms will change the global competitive pattern of car companies
• Car companies with global data operation capabilities will obtain valuation premiums

:

• Investment vision expands from a single car company to the entire intelligent connected vehicle ecosystem
• Niche areas such as vehicle-road-cloud integration, intelligent cockpit, and autonomous driving services contain investment opportunities

:

• Cautiously Optimistic
  : Pay attention to the progress of policy implementation and the compliance construction of car companies
• Select Individual Stocks
  : Focus on head enterprises with sound data security systems and strong technical capabilities
• Avoid Risks
  : Stay away from small and medium-sized car companies with weak compliance foundations and tight cash flow

:

• Embrace Change
  : Data will become the core asset of car companies, and enterprises with strong data capabilities will gain sustained growth momentum
• Layout Ecosystem
  : Pay attention to investment opportunities in the intelligent connected vehicle industry chain, including chips, algorithms, cloud services, etc.
• Global Vision
  : Enterprises with global data operation capabilities will win in long-term competition

1. Policy Execution Risk
   : There is uncertainty about the specific implementation standards and scales of policies
2. Technology Iteration Risk
   : The rapid iteration of AI technology may lead to depreciation of early investments [4]
3. Geopolitical Risk
   : Cross-border data flow faces an increasingly complex international environment [1]
4. Market Competition Risk
   : Industry reshuffling accelerates, and some enterprises may be eliminated [4]

[1] King & Wood Mallesons - Digital Economy Development Research (June 2025) - https://www.kwm.com/cn/zh/insights/topic/digital-economy.html

[2] Soochow Securities - 2025 Investment Strategy for Automotive Intelligence - https://pdf.dfcfw.com/pdf/H3_AP202412081641219266_1.pdf?1733653259000.pdf

[3] King & Wood Mallesons - Research on Cross-border Flow of Automotive Data (November 2024) - https://www.kwm.com/cn/zh/insights/latest-thinking/china/2024/11/

[4] China Business Journal - Intelligent Driving “Elimination Competition” Upgrades, Industry Pattern Accelerates Shuffling (December 2025) - http://jjckb.xinhuanet.com/20251225/f4d95979eae04a2098f845ec13fe737e/c.html

[5] China Business News - Focus on “14th Five-Year Plan”, Intelligent Driving Going Global Enters Deep Transformation (http://www.cb.com.cn/index/show/zj/cv/cv135333961266)

[6] 7its.com - Breaking the Situation · Integration · Symbiosis - 2025 Panoramic View and Outlook of Vehicle-road-cloud Integration Development - https://www.7its.com/index.php?m=home&c=View&a=index&aid=29712

[7] Ministry of Industry and Information Technology Deploys Key Work for 2026 - https://m.voc.com.cn/xhn/news/202512/31226469.html

[8] Electronic Engineering Times - 2025 Blue Book on Endogenous Security Technology for Intelligent Connected Vehicles - https://www.eet-china.com/mp/a460570.html