Text/Lu Qianying

Editor/Chen Feng

Entering the second half of 2024, BYD has further accelerated its intelligent transformation process.

Just yesterday, the BYD and Huawei jointly developed model FANGCHEBAO AUTO BAO 8 was launched. This is the first model jointly developed by BYD and Huawei, and the key to their cooperation lies in the fact that BAO 8 is equipped with Huawei's Kunlun Intelligent Driving ADS 3.0 solution.

Prior to this, BYD signed an intelligent driving cooperation agreement with Huawei in August this year, stating that both parties will conduct in-depth joint R&D on intelligent driving for BYD's FANGCHEBAO AUTO models.

FANGCHEBAO AUTO BAO 8, image source: FANGCHEBAO official website

It is worth noting that the cooperation with Huawei on intelligent driving is only one of BYD's main strategies in this area. BYD's other current main strategy is to accelerate independent R&D.

According to ECNS, BYD recently established a forward-looking department focused on end-to-end technology implementation. At the same time, the company's two in-house intelligent driving teams, the "Tianlang" R&D Department and the "Tianxuan" Development Department, will merge.

These measures highlight BYD's urgency amidst the wave of intelligentization.

Currently, BYD's multiple models have long held the top sales position in various market segments. In the past October, BYD's sales volume exceeded 500,000 units for the first time, breaking the record for monthly sales by a Chinese brand. From January to October this year, BYD's sales volume reached 3.25 million units, representing a year-on-year increase of over 36%.

Despite impressive sales figures and a presence in almost every price range, intelligentization is not BYD's core strength. Compared to some new energy vehicle (NEV) companies that were the first to invest in intelligent driving and smart cockpit technology, BYD was relatively late in innovating and popularizing intelligent technology.

BYD needs to address this shortcoming.

From a long-term perspective, intelligentization is becoming increasingly important in the competition among automakers. This corresponds to the fact that new forces in the automotive industry are accelerating the launch of intelligent driving systems based on their technological first-mover advantage, while traditional automakers are also viewing autonomous driving and end-to-end technology as core development directions.

Under the pressure of competition from multiple parties, BYD is accelerating its catch-up efforts.

At the shareholders' meeting in June this year, BYD Chairman Wang Chuanfu stated that BYD has invested in a research and development team of nearly 5,000 people and plans to invest 100 billion yuan in the future, focusing on cutting-edge technologies such as generative AI and end-to-end large models.

This corresponds to BYD's determination to build a large-scale intelligent driving R&D team through internal adjustments and large-scale talent integration. At the same time, the company plans to popularize basic intelligent driving functions in entry-level models, striving to enhance competitiveness across all price ranges.

However, BYD's transformation path is not that easy. Along with the acceleration of technological research and development, BYD also faces challenges in management and resource integration.

In future intelligent competition, how to balance technological innovation and sales advantages will be BYD's primary task.

1. Is BYD accelerating its catch-up and concentrating elite forces to achieve a breakthrough in intelligentization?

In the wave of intelligentization of new energy vehicles, BYD is at a critical juncture.

In the current market, intelligent driving technology has become a standard feature of new vehicles and a decisive factor in the market, which is a consensus among automakers. For example, Jin Yuzhi, CEO of Huawei Intelligent Automotive Solutions BU, once stated, "Intelligentization has become a key factor for users when purchasing a car. Take WENJIE as an example, over 70% of users choose the high-end intelligent driving version."

Faced with the accelerated layout of new forces in the automotive industry and the pursuit of traditional automakers, BYD has chosen to deeply invest in intelligent driving at this moment.

Recently, BYD has initiated a large-scale talent mobilization within the group, breaking down barriers between departments. Employees interested in intelligent driving can transfer to the intelligent driving team through a simplified process. Nowadays, the two major R&D teams, "Tianxuan" and "Tianlang," have merged into one, integrating a technical team of thousands of people.

According to ECNS, the current core focus of the in-house R&D team is the mass production and implementation of high-end intelligent driving on low-end platforms, with the latest goal being to adapt 50 models by March next year. At the same time, the high-end platform DiPilot 600 adopts dual Orin X chips, focuses on the NOA function without maps in urban areas, and is planned to be first applied to the high-end model Yangwang series in mid-2025.

Image source: BYD official Weibo

This adjustment reflects BYD's dual-track layout in its intelligentization strategy:

On the one hand, BYD hopes to popularize intelligent driving technology to more price ranges of models; on the other hand, the company is also concentrating resources to overcome cutting-edge technologies in high-end intelligent driving, aiming to enhance its in-house R&D capabilities.

Looking back, BYD's intelligentization journey over the past few years has not been accomplished overnight.

Initially, BYD relied on external partners to drive the intelligentization process. As early as 2018, the company established cooperative relationships with industry giants such as Baidu, Huawei, RoboSense, and Black Sesame, attempting to realize basic intelligent driving functions by introducing these technical resources.

At this stage, BYD's strategy was to secure a place in the rapidly developing intelligent market, but the technological dominance was mostly in the hands of its partners.

In 2021, BYD began introducing autonomous driving solutions on high-end models such as DENZA. This year also marked the official launch of BYD's in-house developed operating system - BYD OS. Through this system, BYD achieved the independent integration of various autonomous driving assistance function supply solutions for the first time. This move can be seen as a crucial step for BYD to shift from "technology borrowing" to "independent integration," laying the foundation for subsequent in-house R&D development.

By 2022, BYD's intelligent cooperation circle had further expanded. This year, the company collaborated with Baidu to launch ANP (Autonomous Navigation Pilot), a city intelligent assisted driving product, and deeply integrated the Baidu Map system into its models. At the same time, BYD reached an agreement with chip giant NVIDIA to adopt its platform in future autonomous driving systems.

2023 was undoubtedly a "watershed" for BYD's intelligent development.

Image source: BYD official website

This year, BYD launched the high-end intelligent system "Divine Eye," which includes BYD's independently developed perception and decision-making modules, enabling functions such as highway piloting and automatic parking, and was first applied to high-end models such as DENZA N7. The launch of this in-house system marked the preliminary establishment of BYD's own technological system in the field of intelligent driving, making it no longer solely reliant on external resources.

In the same year, the company significantly expanded its talent pool in intelligent driving. Li Ke, Executive Vice President of BYD, revealed last year that the company already had a software team of four to five thousand people focused on autonomous driving development.

Entering 2024, BYD has further increased its intelligent layout by establishing two R&D teams, "Tianxuan" and "Tianlang," focusing on cutting-edge research and mass production implementation of end-to-end technology. Recently, there have been continuous reports about the imminent integration of these two teams, indicating that BYD may plan to enhance R&D efficiency and promote rapid technology implementation through resource integration.

In terms of capital and technology investment, the company has announced that it will invest 100 billion yuan in intelligent development over the next few years. The company will focus on cutting-edge technologies such as generative AI and end-to-end large models, aiming to maintain competitiveness amidst the wave of intelligentization.

This substantial investment not only reflects BYD's desire for technological independence but also highlights its urgency amidst a fiercely competitive market environment.

2. Popularizing basic intelligent driving functions to entry-level models is BYD's next key step

In the field of intelligent driving, BYD has long prioritized the application of intelligent driving technology to high-end models, first applying advanced intelligent driving technology to high-priced products of brands such as DENZA.

However, the competitive landscape of the market has quietly changed. Nowadays, intelligent technology is rapidly penetrating into mid- and low-priced models. Entry-level electric vehicles priced around 100,000 yuan are also equipped with autonomous driving functions, making intelligence no longer exclusive to high-end models.

For example, models such as XPeng G3i, GAC Aion Y, and Chery QQ Ice Cream have "lowered their stance" in terms of basic intelligent driving functions, quickly entering the mass market with features like highway piloting and automatic parking. This trend of "intelligent equalization" has put considerable pressure on BYD.

BYD clearly realizes that promoting intelligent driving functions solely through high-end models is no longer sufficient to meet the popularization needs of the market. Intelligent driving has transformed from a "luxury configuration" to a "rigid demand" for consumers. For BYD, failing to popularize intelligentization in its main price range of 100,000 to 200,000 yuan will make it difficult to maintain a leading edge in the future market.

Therefore, how to promote the intelligentization of entry-level models has become an important challenge for BYD at present.

Entering 2024, BYD's plan to popularize intelligentization has accelerated. Compared to the high-end positioning of previous systems such as "Divine Eye," BYD is expediting the launch of more streamlined and cost-effective intelligent driving solutions.

At the BYD Ocean Network's third anniversary event held on November 1, Zhang Zhuo, General Manager of BYD Ocean Network Sales Department, revealed to the public that the goal of the Ocean Network is to equip Haier with an intelligent driving system, truly realizing technological and intelligent equalization. This also means that BYD plans to gradually equip basic intelligent driving functions on both Haier and other high-volume entry-level models such as Qin PLUS DM, attempting to attract a wider consumer base.

Image source: BYD official Weibo

The success or failure of this strategy not only depends on the adaptation and cost compression capabilities of intelligent driving technology but also on BYD's ability to quickly adapt to the needs of the mid- and low-end markets, finding a balance between intelligent experience and cost control.

After all, the core consumer group of entry-level models is extremely price-sensitive, and even an additional few thousand yuan can affect purchasing decisions.

However, this strategy is not easy.

The cost issue of "boarding" intelligent driving has always been a challenging problem in the industry. BYD needs to face fierce competition from new forces in the automotive industry and traditional automakers - these competitors not only have lower pricing but also continuously introduce new intelligent features, leveraging their cost-effective intelligent advantages to compete for the market.

Therefore, BYD's plan to popularize intelligent driving not only needs to be rapidly implemented but also needs to form a differentiated advantage in the market. In the future, whether intelligent driving functions can be effectively popularized to entry-level models and even become a "standard configuration" trend will directly affect BYD's market performance.

Currently, the attitude of BYD's senior management is also clear enough. Wang Chuanfu has publicly stated that only by popularizing intelligence across a broader price range can BYD further solidify its market share.

3. Amidst the wave of collective acceleration in intelligentization, the "sales champion" must also sprint

In the field of new energy vehicles, BYD has long maintained its market position relying on strong sales performance, with multiple series of models consistently leading their respective market segments.

In the first half of 2024, BYD sold a cumulative total of 1.6071 million vehicles, ranking first in sales among Chinese automotive brands and maintaining its position as the domestic sales champion for automakers.

In terms of specific models, in the past October, the delivery volume of Song PLUS NEV (including EV and DM-i) was 51,615 units, and the delivery volume of the Qin family (including Qin PLUS and Qin L) was 42,767 units. Multiple models have consistently ranked among the top in sales. These models have not only accumulated a huge user base for BYD but also demonstrated its maturity in the layout of new energy vehicle models.

Image source: BYD official Weibo

However, intelligentization is becoming a key battleground in the automotive market, with competitors accelerating their layouts. BYD can no longer rely solely on scale to win.

In the past two years, as intelligent driving technology has become a new standard in the market, various automakers have accelerated technological upgrades. New forces in the automotive industry have leveraged their technological first-mover advantage to quickly launch intelligent driving systems, capturing market attention.

Traditional automakers have also fully transitioned to intelligent layouts, with cutting-edge technologies such as end-to-end driving and autonomous driving assistance systems being listed as key development priorities for the future.

For example, as early as 2021, Great Wall Motors launched "Coffee Intelligence 2.0," focusing on electronic and electrical architecture, wire-controlled chassis, and intelligent upgrades. By 2023, Great Wall had clearly positioned intelligent new energy as its core, launching 15 new energy vehicle models and rapidly building an intelligent product matrix; Geely, on the other hand, released the "Intelligent Geely 2025" strategy, deploying an intelligent ecosystem through the "One Network and Three Systems" to create an intelligent Geely technology ecosystem network.

This year, Chery also released a high-end intelligent driving technology solution for the future, planning to mass-produce and launch high-end intelligent driving on over a dozen models by 2025, ranging from NOA in mapless urban areas to autonomous flagship high-speed NOA, leveraging end-to-end technology to rapidly achieve large-scale NOA production.

These initiatives demonstrate the active layout and strategic determination of traditional automakers in their intelligent transformation. Against this industry background, despite BYD's leading sales performance, it has also felt significant external pressure.

Faced with a rapidly changing market environment, Wang Chuanfu has clearly formulated BYD's intelligent transformation path. In addition to its existing intelligent driving team and technological investment, BYD also plans to invest 100 billion yuan in the future, focusing on cutting-edge intelligent driving technologies.

It is not difficult to see that BYD hopes to increase investment in intelligentization through strong investments to make up for its shortcomings in this area.

However, this may not be easy for BYD.

Firstly, 2025 will be a critical node in the development of the industry, with most brands expected to complete intelligent upgrades for their core models in this year, making market competition even fiercer.

Secondly, BYD hopes to consolidate its market position through new intelligent driving configurations in this year, achieving a win-win situation for both technology and market share. However, the process of intelligent investment is both time-consuming and capital-intensive, placing higher demands on the company's management, technological reserves, and fund allocation.

As Wang Chuanfu once said, "The first half of the automotive industry is electrification, and the second half is intelligentization," which has become an industry consensus. Amidst the current trend of "all-in intelligentization," the challenges faced by BYD are unprecedented.

For BYD, maintaining a balance between sales and technological leadership while achieving efficient implementation amidst increasing market competition will be an important issue in the coming years.

(The header image of this article is sourced from the BYD official website.)