BYD Leads Sales, Enters Smart Driving Competition
When it comes to the most eye-catching companies in the new energy vehicle industry today, BYD is one of them.
"From a small workshop to a listed company, it is precisely the spirit of daring to think and act that has achieved the breakthrough from 0 to 1, and has led to endless possibilities thereafter."
On the morning of November 18th, BYD held its 30th anniversary and the launch ceremony of the 10 millionth new energy vehicle at the BYD Xiaomo Industrial Park in the Shenzhen-Shanwei Special Cooperation Zone. At the meeting, BYD's Chairman and President Wang Chuanfu shared BYD's dream-chasing story, saying that it was the spirit of daring to think, act, and persist that has brought BYD to where it is today.
From a battery manufacturer to the automotive industry, from a successful listing to anchoring the new energy strategy in the face of numerous obstacles, this company, which has just celebrated its 30th anniversary, has become the world's first automobile manufacturer to achieve the production of the 10 millionth new energy vehicle. To this day, BYD has become a pioneer in the global new energy vehicle industry. This may be a script that many car companies would like to have, and now, BYD has gone through the first half of the script.
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At present, the outside world's attention to BYD, in addition to focusing on production and sales, also concentrates on one point: when entering the second half of the industry competition centered on intelligence, can BYD achieve a breakthrough in intelligence? Behind this, it is not only related to BYD's future business model and competitive path but also to the continuation of the script for China's new energy vehicle industry.
Acceleration of Intelligence
According to the International Energy Agency (IEA) forecast, the global electric vehicle market will maintain growth on the record high base of 2023 in 2024, with an expected annual sales volume of 17 million vehicles and a penetration rate of over 20%. New energy vehicles have become the general trend of global automotive industry development.
From the production side, traditional car manufacturers, new car manufacturers, and internet giants have all joined the car manufacturing team. The Passenger Car Association's statistical data shows that in October this year alone, the output of China's broad sense passenger cars reached 2.671 million vehicles, a year-on-year increase of 7.9 percentage points; the output of narrow sense passenger cars reached 2.648 million vehicles, a year-on-year increase of 8.2%.
The research report from Dongxing Securities shows that electrification provides the energy basis for intelligence. As the industry chain matures, the homogenization level of electric vehicles increases, and industry competition intensifies, providing intelligent functions will become the inevitable choice for car companies not to fall behind.
The booming new energy vehicles are also accelerating on the road to intelligence under the support of policies and market followers.
If we start from the release of the iPhone 5S and iPhone 5C in 2013, the popularization of touch screens in hot-selling models has promoted some car companies and technology companies to start thinking about "bringing mobile phones to cars," China's new energy vehicles have entered the era of intelligent networking for 11 years.
As early as 2014, the new force of car manufacturing - NIO, co-founded by internet entrepreneurs such as Li Bin and Richard Liu, as well as investment institutions such as Tencent and Hillhouse Capital, has set its sights on the high-end intelligent electric vehicle market. Similarly known as one of the three musketeers of new car manufacturing forces, "Li Auto," which was established in 2015, positioned its products as "committed to developing intelligent electric vehicles better than fuel vehicles" from the beginning.
Taking the "Internet Plus" action plan proposed in the government work report in 2015 as the watershed, internet giants have competed to enter the automotive manufacturing industry and have begun to get involved in vehicle networking and smart cockpits, and there have been more intersections between voice technology and cars.
However, BYD, which was the first to call out the slogan "The first half of new energy vehicles is electrification, and the second half is intelligence," has the most eye-catching achievements in the intelligence wave in terms of production and sales.
Public data shows that in June 2023, BYD's sales volume reached 253,000 vehicles, a year-on-year increase of 88.79%. In the just-ended October, BYD's monthly sales volume broke through 500,000, with a year-on-year growth rate of 66.2%, breaking the monthly sales record of Chinese car companies and the global car company's new energy monthly sales record. As of the end of October this year, its cumulative sales volume for the year has reached 3.23 million.
This eye-catching performance comes from BYD's self-sufficient ecosystem, which has been built for many years, forming strong cost control capabilities and market response speed.
From a technical perspective, BYD has made significant efforts in recent years to master the core technologies across the entire industry chain, ranging from batteries, electric motors, and electronic control chips to complete vehicle manufacturing. Innovations such as blade batteries, DM-I plug-in hybrid technology, and e-platform 3.0 have gained widespread market recognition for their advancements in automotive power systems.
A market insider once pointed out in a media interview that BYD won the first half of electrification with all its might, but it seems to lack ambition in the field of intelligence.
Urgent need for upgrade and iteration
It was widely spread in the industry that Wang Chuanfu said at BYD's financial report exchange meeting at the beginning of 2023, "Unmanned driving is nonsense, making a fancy thing, that's all cheating, it's the emperor's new clothes." The leader's view on intelligence may have once limited BYD's imagination about intelligence.
But before half of 2023 had passed, Wang Chuanfu changed his tone at an internal meeting, clearly upgrading "smart driving" to the core strategy of BYD.
Entering 2024, BYD launched a new strategy for intelligent development - whole vehicle intelligence - at the Dream Day launch in January, showcasing intelligent driving, intelligent parking, intelligent cockpit, and other technologies; and released the industry's first intelligent fusion architecture "Xuanji" architecture and the pioneering dual-cycle multimodal AI Xuanji large model.
In March, it cooperated with NVIDIA, announcing that future models will use NVIDIA Drive Thor chips; in August, it signed an intelligent driving cooperation agreement with Huawei, stating that the two parties will carry out in-depth joint research and development on intelligent driving for BYD's方程Leopard cars. On November 13, the jointly created model, the Leopard 8, was launched. This is the first model jointly created by BYD and Huawei, and it is equipped with Huawei's Qian Kun intelligent driving ADS3.0 intelligent driving solution.
BYD's heavy investment in the intelligence field reflects that it has entered the fast lane in the first half of electrification, and the second half of intelligence is shifting gears to accelerate. It obviously feels the urgency brought by the trend of the industry. However, in terms of its performance in the intelligent field, it is not outstanding.
This year, BYD launched its latest achievement in the intelligent field - the Xuanji architecture, which integrates many technologies in the direction of electrification and intelligence, including Yi Si Fang, DMO, e-platform, Yunjia, three electric systems, chassis systems, body systems, intelligent cockpit, and intelligent driving.
This kind of integration is very rare in the industry, showing BYD's determination to innovate and explore on the road to intelligence. However, compared with companies that focus on technology, there is still a lack of comprehensiveness in terms of platformization and systematization.
Taking Huawei as an example, its built autonomous driving ecosystem covers the intelligent vehicle control platform (VDC), intelligent driving platform (MDC), and intelligent cockpit platform (CDC). BYD has cooperated with Huawei and has successfully equipped the high-end model, the Equation Leopard 8, with Huawei's MDC610 auxiliary driving chip, and is equipped with Huawei's self-developed 192-line laser radar and binocular perception camera.
However, such cooperation, although it can significantly increase the technical content of the product, will objectively also increase the cost burden. From the brand line, BYD still needs to accelerate the pace, promote the iterative upgrade and popularization of intelligent applications.
On the consumer side, a deep user survey of the BYD Han EV|DM-i models conducted by the Electric Vehicle User Alliance, reveals the urgent challenges faced by BYD in the intelligent field.
Users' overall satisfaction with the above two models is as high as 8.72 points, and the satisfaction rate has reached 85.5%. However, users' positive evaluations are mainly focused on appearance, space, and pre-sales service. In comparison, satisfaction with intelligent driving and intelligent driving is significantly lower, both not reaching 70%.
Some car owners have bluntly pointed out that the intelligent driving experience of the BYD Han is not satisfactory, especially after enabling the intelligent pilot function, the vehicle will sway left and right, and there is a lack of automatic deceleration processing in the intelligent cornering scenario.
In terms of the intelligent cockpit, users feedback that the frequency of OTA upgrades is too low, only one push in half a year, and the push to old car owners is relatively late, and the upgrade lacks substantial content updates. The above issues also lead to 31% of the surveyed car owners being unwilling to recommend this model to the outside world, and the lag in intelligence has become a major obstacle to the brand's reputation.
Intelligence is not only an upgrade of hardware and technology, nor is it limited to the realization of functions such as autonomous driving, intelligent networking, and intelligent interaction. It is more profoundly reflected in how to improve the safety, comfort, convenience, and interest of cars through technological innovation, thereby optimizing the user experience in all aspects.
Faced with increasingly fierce market competition and consumers' growing demand for intelligence, BYD urgently needs to accelerate the upgrade and iteration of intelligent technology and achieve a leap in software and services.
High-order intelligent driving, the highlight of breaking through in the second half
In addition to intelligence, high-order intelligent driving is also one of the main stories in the "second half" script of new energy vehicles, which is another highlight that BYD needs to put more effort into. However, BYD's high-order intelligent driving technology started relatively late and is far from being able to help it achieve large-scale production and win the "second half" decisively.
As early as last year, new forces such as NIO, XPeng, and Li Auto, as well as old car companies like Great Wall and Changan, have successively invested in the urban NOA field war, and each has its own technology. However, BYD is not dominant in the high-order driving field and is significantly behind competitors in urban NOA.
It was not until July last year that BYD officially launched the high-order intelligent driving campaign, launching the first model with high-order intelligent driving capabilities, the Tengshi N7, equipped with its self-developed "God Eye" high-order intelligent driving assistance system. However, in terms of sales, both N7 and N8 did not replicate the glory of Tengshi D9, and the reason is that BYD's high-order intelligent driving has a significant gap compared to domestic top players.
The Tengshi N8 is mainly based on the needs of home and camping scenarios and does not provide high-order auxiliary driving configurations. Although Zhao Changjiang, the general manager and chief co-creator of Tengshi Automobile, once explained that due to the different positioning of each model, N8 focuses on home and camping scenarios, and it is enough to have some auxiliary driving functions, but its relatively conservative intelligent configuration also forms a sharp contrast with some competitive models pursuing high-order auxiliary driving configurations.
According to research data from Yiou Think Tank, the current scenario-oriented auxiliary driving functions are developing towards all-scenario auxiliary driving, and consumer demand for high-order autonomous driving functions is also rising rapidly.
Among users with high-speed NOA functions, 41.1% of users use high-speed NOA functions 2-3 times a week, and 35.7% of users use the function as many as 8-10 times a week; among users with urban NOA functions, 40.6% of users use it 2-3 times a week, and 25% of users use the function as many as 8-10 times a week. Although high-order autonomous driving cannot completely replace human driving, it has shown a trend of dependence on people.
Looking back at the few high-order intelligent driving models of BYD, they all belong to high-end models and have not been popularized across the entire vehicle series. Especially this year, the BYD and Huawei cooperation model, the Equation Leopard 8, has greatly improved the overall technical level through the Huawei platform, but this cooperation model also means that the product cost is very high, and the price starting at 379,800, to a certain extent, will make BYD lose some market competitiveness and is difficult to shake the position of the first echelon of high-order intelligent driving technology manufacturers.
Even in August this year, with the launch of the 2025 BYD Seal, the 650 intelligent driving version with high-order intelligent driving capabilities is priced at 216,800 yuan, allowing BYD's high-order intelligent driving models to reach the 200,000 yuan range. However, XPeng Motors has already made a name for itself with the XPeng MONA M03 as the "only high-order intelligent driving under 200,000 yuan."
According to iResearch Consulting's forecast, the penetration rate of high-order intelligent driving is expected to exceed 25% by 2025, and the market is currently in the blue ocean stage. At this stage, BYD must fully exert its high-order intelligent driving research and development strength and quickly implement self-developed high-order intelligent driving functions to affordable cars in order to break through in the increasingly fierce competition in the automotive industry in recent years.
According to BYD's third-quarter report, in the first 9 months of this year, BYD's R&D investment reached 33.32 billion yuan, a year-on-year increase of 33.6%. As of the end of October, BYD's cumulative R&D investment exceeded 160 billion yuan.
BYD's 2024 third-quarter report
At the 30th-anniversary launch, Wang Chuanfu also introduced that BYD currently has 11 major research institutes and 110,000 engineers. Among the college students recruited by BYD this year, the proportion of masters and doctors is close to 70%, and the proportion of R&D personnel is close to 80%. This shows BYD's emphasis on intelligent driving technology.
On the R&D front, BYD's high-order intelligent driving solution, under the data-driven development paradigm, intelligent driving data has become the basic nourishment driving algorithm progress, and AI computing power has become the key driving force determining the speed of algorithm iteration. It has adopted lidar and light map technology, hoping to promote the popularization of high-order intelligent driving and technology empowerment. However, the cost of lidar is high, and pure vision occupies the network, which has become a difficulty that must be overcome, and BYD also needs time to overcome these technical challenges.
Industry insiders all believe that the future trend of BYD, intelligence will become the key move. According to BYD's current investment in R&D, funds, talent, and technical accumulation, it has shown its determination and strength to decide the "second half" of intelligence, and high-order intelligent driving has also achieved breakthroughs in specific models - the objective reality is that compared with competitors with significant advantages in the market, the sales champion BYD still has a significant gap, which may also be Wang Chuanfu's biggest worry at present.