In a remarkable turn of events, BYD Company Ltd. (002594.SZ/01211.HK) has once again shattered the trillion-yuan market cap threshold as of February 14, 2023. Closing at 356.05 yuan per share, its market capitalization reached an unprecedented 1.04 trillion yuanThis resurgence comes nearly three years after its last foray into this elite market valuation, which was primarily fueled by explosive sales growth during 2022. Fast forward to now, and investor confidence is signaling a renewed appreciation for tech stocks, particularly those centered around innovative firms like BYD.
The release of the DeepSeek-R1 model in January 2025 introduced a transformative concept of "computational power equity," profoundly influencing global investor perspectives on Chinese tech companiesThis shift towards valuing technology-driven enterprises is indicative of broader changes within the automotive sector, particularly in the wake of the electrification and automation trends that have gained prominence in recent years.
In February, BYD's concept of "intelligent driving equity" captured industry attention as the company successfully integrated high-end autonomous driving technologies into more affordable vehicle modelsThe launch of the Seagull Intelligent Driving version at a mere 69,800 yuan exemplifies BYD's rapid implementation of this strategyMorgan Stanley recently highlighted that generative AI is exacerbating the technology gap between traditional automakers and emerging electric vehicle manufacturers, acting as a crucial catalyst for structural and commercial transformations in the global automotive landscapeBYD's "God's Eye" technology stands as a potential equivalent to DeepSeek’s impact in the autonomous driving realm.
The wave of excitement surrounding BYD's market revival can be traced back to February 6, 2023, when the company experienced an explosive surge in share volume, nearly hitting its trading limitOn that day, BYD issued a strategic announcement regarding its upcoming intelligent driving conference scheduled for February 10 in Shenzhen
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The conference’s focus laid on technological innovations aimed at reducing barriers to intelligent driving adoption, promising to enhance user experiences across various vehicle segments.
Historically seen as a potential weakness for BYD, the sudden news regarding intelligent driving capabilities sparked a significant interest among investors, resulting in a continuous upward trajectory of BYD’s stock price leading up to the conferenceOn February 10, the company unveiled its advanced intelligent driving system, "God's Eye," effectively dismantling the prevailing notion that intelligent driving equates to high costs within the automotive market.
BYD’s intelligent driving solutions target a wide price range, from 69,800 yuan to over one million yuanTo this end, the company has released three variations of the God’s Eye technology: God’s Eye A (high-tier three-laser version DiPilot 600), God’s Eye B (high-tier laser version DiPilot 300), and God’s Eye C (high-tier three-eye version DiPilot 100). The A version caters to the Yangwang brand, while the B is intended for the Denza and BYD brands, and the C is specifically designed for BYD vehicles.
What truly stands out is the God’s Eye C solution, which boasts an impressive array of features including twelve cameras, a front-mounted three-eye camera, five millimeter-wave radars, and twelve ultrasonic sensorsThe cost-effective intelligent driving domain control utilizing Nvidia Orin N chips and Horizon J6 chips is estimated to be between 3,000 and 4,000 yuanDespite its affordability, this innovative solution is capable of managing complex driving tasks, including those requiring navigational planning, lane keeping, adaptive cruising, self-changing lanes, obstacle avoidance, as well as advanced valet parking (AVP) and memory-based navigation (MNOA) functions.
The democratization of intelligent driving technology, akin to the emergence of DeepSeek, signals an end to the high-computational power monopoly in the automotive industry, enabling sophisticated driving capabilities with chips rated at just 100 TOPS
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This paradigm shift has been acknowledged by Citic Securities, which views BYD's developments as pivotal for the company as it approaches an important milestone in the intelligent vehicle segment in 2025. With a fortified model lineup that targets high-end markets, competes with joint venture brands, and innovates in accessible intelligent driving, BYD's trajectory promises substantial progress and increased competitiveness in the rapidly evolving electric vehicle sector.
This transformation portends sweeping changes across the entire automotive landscapeBYD’s goal of achieving five million vehicle sales by 2025 positions 100 TOPS products to comprise a remarkable 40-50% of its annual salesThis aligns with an anticipated consumer market expansion of approximately 2 to 2.5 million unitsAs open-source models gain momentum, BYD is poised to create a "catalyst effect," encouraging a wider array of manufacturers to embrace intelligent driving solutions, particularly within the budget vehicle segment.
The widespread application of intelligent driving in economical vehicles is set to spur growth across various segments of the supply chain, including algorithms, chips, domain controllers, connectors, radars, and drive-by-wire chassis systemsConsequently, China's electric vehicle supply chain is transitioning from a leading position in battery technology toward a robust integration within the intelligent automotive sector.
With the reevaluation of Chinese tech assets now underway, companies like BYD and DeepSeek have made meaningful strides in commercializing cutting-edge technologies, attracting the renewed interest of global investors, particularly in relation to innovative tech stocksWhile BYD anticipates sales of 4.27 million vehicles in 2024—2.4 times higher than Tesla's projected sales of 1.79 million—its price-earnings ratio remains at 34.38, significantly lower than Tesla's lofty valuation of 174.48.
The inflated valuation of Tesla is primarily bolstered by the expected applications of intelligent driving capabilities
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According to Ark Invest’s latest report, the anticipated decrease in the cost of autonomous driving technology will unlock a $10 trillion market by 2030, predominantly highlighted by the projected rise of robotaxi services, which may capture as much as 50% market share by that time, generating substantial annual revenues for Tesla.
Simultaneously, Morgan Stanley posits that a company capable of addressing the "autonomous driving problem" stands at the forefront of resolving a myriad of dual-use applications across the board, extending even to humanoid roboticsThis pricing rationale is gradually aligning itself with Chinese tech firms exemplified by BYD's advances in the autonomous sector.
BYD’s initial entry into the trillion-yuan market in June 2022 followed its robust transformation to focus solely on electric vehicle manufacturingThe monthly sales of over 100,000 new energy vehicles spurred the stock to reach the one trillion yuan markHowever, the combination of intense market competition and other multifactorial pressures caused its valuation to dip below this threshold thereafter.
Despite BYD achieving impressive revenue growth of 96.2% and 42.04% year-on-year in 2022 and 2023 respectively—along with skyrocketing net profits—it has thus far struggled to maintain its market cap above the trillion-yuan lineNotably, as of the third quarter of 2024, BYD's revenues have surpassed Tesla's, and its sales in the electric vehicle domain are projected to outpace those of Tesla; nevertheless, investor attention remains elusive.
This apparent disconnect can be attributed to the lingering valuation frameworks that global investors apply to Chinese tech firms, which often fail to capture the breakthroughs and commercial viability within emerging technological sectorsRecent assessments point to a growing recognition that both China and the U.S. hold pivotal roles in the global autonomous vehicle arenaWhile autonomous delivery services in the U.S. remain largely confined to campus settings, limiting practical training data in urban settings, the proliferation of robotic vehicles on Chinese roads offers greater commercialization potential.
The introduction of DeepSeek has incited a critical reassessment of Chinese tech companies among global investors
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