Recently, $BYD COMPANY (01211.HK)$ The "Smart Driving Equity" of Electric Vehicles has created significant waves in the auto industry.

Intelligent driving technology has traditionally focused on high-end models, creating a high price barrier for consumer experience. However, the intelligent driving models released by BYD cover multiple series such as Dynasty and Ocean, lowering the price of high-speed intelligent pilot driving (high-speed NOA) models to the 0.07 million yuan level.

Yu Chengdong, Executive Director of Huawei, Chairman of Terminal BG, and Chairman of Intelligent Automobile Solutions BU, recently stated on Weibo that intelligent driving, being usable and functioning well and safely, is a completely different realm. "Reducing costs and popularizing basic intelligent driving assistance is commendable and worth celebrating! However, confusing high-level intelligent driving concepts and labeling the basic entry-level intelligent driving assistance as high-level intelligent driving is inappropriate."

Reporters from the Star Daily visited several new energy brand stores in Shanghai, Shenzhen, Wuhan, Chengdu, and other places, and front-line staff believe that BYD's comprehensive intelligent driving strategy will not greatly impact their mid-to-high-end models.

On one hand, BYD models equipped with urban intelligent pilot functionality (urban NOA) have starting prices exceeding 0.2 million, showing no significant price advantage compared to competing brands with similar urban NOA models; on the other hand, front-line personnel generally believe that BYD's intelligent driving is still in the early stages and may not catch up to pioneer companies in terms of experience.

In the Industry Chain, due to BYD's overall large sales volume, coupled with BYD's sales target of over 60% for smart driving models, this will lead to an objective increase in order volume for upstream companies. From the investors' perspective, BYD has shifted the price war into a technology contest, which not only creates capacity pressure on upstream but also imposes strict cost requirements on the supply chain, leaving the profitability on the supply chain side to be observed.

The smart driving models have attracted consumer attention with the strategy of 'more quantity without increasing prices'.

BYD has launched the 'Eye of Heaven' high-level intelligent driving system, which is divided into three versions A, B, and C based on hardware configuration, functional positioning, applicable models, and brand.

Version A features a configuration of three Lidar sensors, five millimeter-wave radars, and eleven cameras, equipped with$NVIDIA (NVDA.US)$dual Orin chips. Version B is equipped with a single Lidar combined with millimeter-wave radar and cameras, and the computing power is based on a single OrinX. Version C adopts a pure visual scheme, composed of five millimeter-wave radars, twelve cameras, and twelve ultrasonic radars, with chips being Horizon J6M or NVIDIA Orin N.

Versions A and B support urban intelligent piloting driving (city NOA), while the current pure visual scheme of the Eye of Heaven C does not support the full meaning of city NOA, only supporting high-speed intelligent piloting driving (high-speed NOA). However, it cannot be ruled out that this model may receive an OTA upgrade for city NOA functionality on fixed commuting routes in the future.

According to reports from the 'Star Daily' on BYD's official website, the models equipped with the Eye of Heaven B scheme have a minimum starting price for the Han, Tang, and Song models.

A reporter from the Star daily visited a BYD Ocean Network store in Shenzhen, where the staff informed that the display vehicle supporting intelligent driving had not yet arrived, and there was only the BYD Song Plus available for test drives. "The appearance and interior of the new and old models are not significantly different; they only added intelligent driving functions."

The staff member also added that, currently, with the new version launched, the official price of the old model has not been adjusted, but the store is offering around 7,000 yuan in incentives for the old models. "We can negotiate more about the specifics of the incentive; the new version hasn’t been out long, and ordering the new model may require one to two months of waiting, depending on the model."

When a customer arrived at the store to look at the car, the first thing they asked was about the intelligent driving related functions of the new BYD model. The customer told the Star daily, "I heard that the intelligent driving version had to be experienced in-store. I also checked out the Lynk & Co Z10 and XPeng Mona M03, and now intelligent driving (highway NOA) is basically a standard feature. It’s better to have more functions for the same price."

Another owner of the BYD Han DMI Elite model told the Star daily, "I bought this car for a down price of 0.18 million yuan before the New Year; when I bought it, the sales didn’t mention any model changes. We also thought that the price of the model having just changed would not have discounts, and the BYD Han wouldn’t see too many upgrades either. Who knew that within two months, BYD released the intelligent driving version, and the guide price didn’t increase."

BYD sales store stated that due to hardware configuration differences between the new and old models, they cannot upgrade the old model to add intelligent driving functions via OTA in the future. "Returning the car is definitely not an option, and we haven’t heard of any compensation policies; besides, the old model already received purchase incentives."

The reporter learned that among models priced at the level of 0.1 million yuan, there are models including GAC Aian AION RT, Baojun Yunhai, etc. that support highway NOA function, but the only models below 0.1 million yuan that support highway NOA are BYD Qin L, Seagull 05, and Seagull. Among them, the top version of XPeng Mona M03, priced at 0.1558 million yuan, also supports urban NOA, making it the lowest-priced model supporting that function currently.

BYD does not yet have a price advantage for high-end intelligent driving, but it will impact the joint venture car market.

The reporter from the Star daily has found that currently, domestic brands in the 0.2 million yuan level basically all come standard with highway NOA, while urban NOA function generally requires an additional payment to upgrade to over 0.25 million yuan, with only the XPeng P7+ providing this feature as standard in the 0.2 million yuan models without extra charges.

Among them, Xiaomi,$ZEEKR (ZK.US)$, ZhiJi, UnUsUaL,$NIO Inc (NIO.US)$, and Wei brand's high-end smart driving models all launched time-limited free policies upon release. In addition to enhancing the configuration (buyout),$Tesla (TSLA.US)$, Huawei Hongmong's "Three Realms (Questioning Realm, Smart Realm, Enjoyment Realm)" and Avita simultaneously adopt both buyout and subscription methods;$NIO Inc. USD OV (NIO.SG)$Its sub-brand Le Dao adopts a subscription model, which is paid monthly.

Reporters from the Star visited several stores in Peking, Chengdu, Shanghai, and Wuhan, including Hongmong Intelligent Travel, NIO, ZEEKR, etc., but sales in each store believed that BYD's overall upgrade of intelligent driving would not have a significant impact on their own brands.

According to the salespeople at Huawei Hongmong Intelligent Travel, BYD's advantage lies in its complete series and wide price range, which contrasts with Huawei's brand positioning. "Huawei's intelligent driving system is in the first tier of domestic automotive companies, reaching L3 level, with strengths in 192-line Lidar, while some companies use 128-line Lidar, which is weaker in terms of resolution and safety."

The salesperson also added that even the Q&A M5, which has a landing price of around 0.24 million, is equipped with a 169-thread Lidar.

During the visit to the Xpeng store, a salesperson told reporters that currently, Xpeng's intelligent driving and Hongmong Intelligent Travel are both in the first tier, and Xpeng has a relatively high fault tolerance rate, basically achieving zero errors. "However, BYD's intelligent driving has just started and will need some time to confirm whether it is useful."

Sales from Lynk & Co believe that among models priced around 0.1 million, Xpeng Mona M03's intelligent driving may be stronger, but other brands (highway NOA) all use third-party solutions, so the differences are not significant.

Additionally, during visits to stores of other brands like NIO, ZEEKR, and Tesla, salespeople believed that BYD's high-end models (such as Tengshi, Fangchengbao, etc.) do not rank in the first tier of the industry for intelligent driving capabilities, and the Dynasty and Ocean series models are not in the same price range as their main selling models, so this would not have a significant impact on their own brands.

Taking ZEEKR as an example, reporters from the Star learned that the original price of the ZEEKR 7X luxury five-seat SUV long-range all-wheel-drive intelligent driving version is 0.27 million yuan, and the landing price after the national subsidy and brand discount is around 0.25-0.26 million yuan. The price of the brand's lowest intelligent driving model finally lands at 0.15 million yuan.

Some industry practitioners believe that although BYD's "Full Series Smart Driving" strategy has limited impact on previously launched smart driving autonomous brands in high-end models, joint venture brands may face greater pressure.

The practitioner further explained to the Star Daily reporter that in the field of smart driving, many joint venture vehicles are still in a wait-and-see or initial stage. "In addition to technical factors, the development of smart driving hardware and software is itself costly. How to price smart driving models to spread costs, and whether to adopt a one-time purchase system or a subscription system, are issues that joint venture brands need to consider before entering the market."

The aforementioned individual stated that for joint venture brands that have just launched smart driving models, their own brand is both an "Asset" and could also be a "Liability." If the layout for smart driving is lagging, even with a historical brand and traditional advantages, it may give an impression of being technically conservative and outdated, making it difficult to attract young consumers.

According to incomplete statistics by the Star Daily reporter, currently among joint venture brands, Dongfeng Nissan has launched the Dongfeng Nissan N7 equipped with a high-level smart driving system developed in partnership with Momenta, priced between 0.15 million yuan to 0.2 million yuan; the Audi A5L, expected to be launched in 2025, is likely to adopt Huawei's ADS 2.0 system or ADS 3.0 system; the FAW Toyota's Toyota bZ3C is expected to be launched in early 2025, equipped with an end-to-end large model that can basically achieve L2++ level autonomous driving.

In$Toyota Motor (TM.US)$Store sales told the Star Daily reporter that a new model, the Platinum Smart 3X, featuring urban NOA, will officially launch on March 3rd, and is currently in the blind ordering stage. "The model with a 520 km range plus urban NOA is estimated to be priced around 0.15 million yuan. The prices are not yet confirmed, but once BYD's Heavenly Eye is released, it may trigger a price competition, and prices might even drop further."

BYD's "Q&M Dental Smart Driving" may drive the upstream industry to scale up.

According to reporters from the Star Daily, BYD's projected annual sales this year are expected to exceed 5 million units, with over 60% of the models equipped with high-speed NOA and above intelligent driving technology, indicating that the market will see an increase of over 3 million intelligent driving electric vehicles.

This means that upstream component companies such as intelligent driving chips, camera modules, onboard optical lenses, Lidar, and high-speed connectors will receive a significant number of Orders.

Among them,$SUNNY OPTICAL (02382.HK)$、$OFILM Group Co., Ltd (002456.SZ)$is an important supplier of onboard optics for BYD. OFILM's product lines mainly include onboard cameras, onboard lenses, and integrated vehicle control systems for parking.

In terms of Lidar, brokerage surveys indicate that,$ROBOSENSE (02498.HK)$The products account for 80% of BYD's high-end solutions, covering 12 models including BYD Han, Seal, Yangwang U8, DENZA N7, Haiyan 07, and Song L. Sucheng JuChuang stated that both "Eye of the God" A and B are configurations with Lidar.

In addition, the Radar supplier$Hesai (HSAI.US)$Technology also announced on February 11 that cooperation with BYD in smart driving is about to enter the mass production phase for car installation.

Hesai Technology claims that its products mainly supply the BYD "Eye of the God" B platform, with most new models from BYD and DENZA expected to be equipped with Hesai ATX Lidar. By 2025, over ten models under BYD will launch with Hesai Lidar, and the expected delivery volume to BYD this year will reach several hundred thousand units.

Horizon, as BYD's only domestic supplier of smart driving chips, announced on February 10 that the "Eye of the God" system will be equipped with the Journey 6 series, with Journey 6M being the first to be mass-produced for installation. The Journey 6 series will be mass-produced for models under BYD, including the Dynasty and Ocean series, covering the mainstream market of 0.1-0.2 million.

In an interview with the "Star Daily", a relevant person in charge of Smart Sesame, a company developing automotive-grade autonomous driving computing chips and platforms, stated that the company has a long-term cooperative relationship with BYD. The launch of BYD's "Eye of the God" technology, especially its popularity across all models, indicates that the spread of smart driving technology to mid- to low-end models is an unstoppable trend.

$BLACK SESAME (02533.HK)$It was also added that BYD's "Heavenly Eye" system is rapidly equipped on Low Stock Price models, which will bring new opportunities to the entire Industry Chain. All Automotive supply chain enterprises will benefit from this and also feed back technical innovation and development to upstream enterprises.

However, some opinions suggest that while BYD's strategy for Smart Automobile brings considerable Orders to upstream suppliers, it may also trigger capacity pressure, increase cost control requirements, and intensify competition among upstream supply chain enterprises.

An early-stage investor believes that Smart Automobile will become the "standard configuration" for automotive companies in the future. However, she noted that BYD maintains very strict control over the supply chain while ramping up production, and the profitability of the enterprises along the chain remains to be seen.

Gu Chao, Vice President of Mudou Capital, told the Star Daily reporter that BYD's launch of the "Q&M Dental Smart Automobile Era" was expected. However, BYD is known in the Industry as a "price butcher," and with its hardware and Smart Automobile strategy, this pressure is not only passed on to its suppliers but also transmitted to the entire industry ecology through the end market.

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Editor/rice