BYD threw a bombshell into China’s EV sector with its Monday reveal that its advanced driver assistance system—known as “God’s Eye”—is now available in over 20 models, with the cheapest model, the Seagull, priced at under $10,000.
Hong Kong-traded EV shares plunged on Tuesday, following the reveal. Li Auto, Xpeng, and Geely Auto fell by 6%, 9% and 10% respectively. Nor did BYD gain much on the reveal: Shares rose over 4% on Tuesday, hitting an all-time high of 345 Hong Kong dollars ($44.27), before paring back gains to end the day slightly down.
Still, BYD shares are performing better than its U.S. rival Tesla. The Chinese automaker is up over 25% for the year so far; Tesla is down 7%.
BYD's "God's Eye"
On Monday, BYD revealed it's integrating its advanced driver assistance system across more of its lineup at no additional cost. The features include the ability to autonomously navigate highway traffic (under human supervision); this makes BYD’s system similar to services offered by Tesla, rather than true self-driving.
Previously, BYD had offered its assisted driving in models priced above $30,000. But on Monday, the carmaker revealed that its Seagull model, priced at an affordable 69,800 yuan ($9,555) will now include intelligent driving.
BYD founder Wang Chuanfu said that smart driving is now becoming a universal feature of today’s cars, like a seatbelt or an airbag, rather than a luxury.
But BYD’s decision will likely be received poorly among its competitors. Putting smart driving in a sub-$10,000 model could reignite a price war in China’s EV sector, forcing automakers to dangle even more incentives to win customers in what might be the world’s most competitive car market.
Chinese consumers increasingly value models with more digital and connected features when choosing a car to buy. Legacy automakers, including some foreign brands, have struggled to keep up with changing consumer tastes.
China' champions join forces
Also on Monday, BYD revealed that it was integrating DeepSeek’s AI models into its intelligent driving software, following other local players like Geely and Great Wall Motor. China’s tech sector is quickly embracing the Chinese AI startup DeepSeek, whose OpenAI-competing model has shocked investors around the world in recent weeks.
Chinese carmakers have banked on assisted driving as a way to stand out in a competitive car sector. Startup Xpeng rolled out an assisted driver system in Guangzhou in late 2022; by February of last year, the carmaker had expanded the system across most of China.
Li Auto, Nio and Xiaomi also offer some level of intelligent driving software, such as automated parking.
Tesla, meanwhile, is still waiting to turn on its assisted-driving services in China, one of its most important markets. Despite a personal lobbying trip to Beijing by Elon Musk last year, Tesla still hadn’t gotten approval from Chinese authorities by the end of 2024.
In January, Musk admitted that Tesla was “in a bind” over its ability to offer self-driving in China. “They won't allow us to transfer training videos outside of China. And then the U.S. won't let us do training in China," he told analysts.
Tesla’s China sales fell by 11.5% year-on-year in January, while BYD’s rose by 47.5%, according to data from the China Passenger Car Association, though an earlier Chinese New Year holiday may have disrupted usual consumption and production patterns.
