How BYD's Smart Driving Feature Served as a Price Cut (AI Translation)

【周刊提前读】比亚迪“全民智驾”变相降价 降本与出海应对围攻

[para. 1] On February 10, BYD Co. Ltd. expanded its offerings in the intelligent driving space, launching 21 models priced between 100,000 and 200,000 yuan, all equipped with its "Eye of the God" smart system. This move is a strategic response to fill a longstanding product gap and start a price war by introducing intelligent driving features at significantly reduced prices.

[para. 2] Once known for their focus on electric rather than intelligent features, BYD aims to redefine their market positioning with new smart systems that support urban and high-speed navigation. Their strategy includes a mass adoption of low-cost solutions, making advanced features more accessible.

[para. 3][para. 4] BYD's price war strategy has been successful, positioning them as a leading car manufacturer in China, surpassing both Volkswagen and SAIC Motor Corporation in 2023 and 2024, respectively. Their vertical integration strategy across components, except for tires and glass, enables competitive pricing and enhances profitability despite price cuts.

[para. 5][para. 6] Despite price reduction requests causing concern among suppliers, annual price negotiations remain industry norms for car companies and suppliers. Regulatory authorities have set constraints on BYD's 2025 strategy, making it difficult to replicate the strategy of cutting prices aggressively from previous years. Instead, BYD is focusing on maintaining market share through expanded features without raising prices.

[para. 7] BYD’s efficient use of "DiChain" blockchain-based payment systems has raised concerns about their long-term sustainability, as suppliers are often required to wait for payments, impacting the supply chain dynamics. This has drawn criticism but allows BYD to manage finances efficiently during rapid expansion phases.

[para. 8][para. 9] Overseas, BYD made notable strides, with a 73.8% growth in car sales abroad in 2024. Plans are set to nearly double overseas sales by 2025. They aim to capitalize on market scarcities, particularly in the ASEAN countries and regions like Brazil, Hungary, and the EU to expand their foothold in the new energy vehicle (NEV) market.

[para. 10] In Europe, BYD faces stiff competition despite launching new models; the imposition of anti-subsidy tariffs by the EU could slow expansion efforts. Still hound by the complexities tied to replicating its domestic market success internationally, BYD navigates challenges posed by resistance from local markets and potential trade barriers.

[para. 11][para. 12] Domestically, the track remains fiercely competitive with multiple brands entering the price wars. Automakers like Chery, Geely, and Great Wall Motors have adopted strategies to counter BYD's aggressive tactics, revealing intensified industry rivalry as other brands push back with similar price cuts and promotions, emphasizing smart driving capabilities.

[para. 13] Ultimately, BYD's strategy and success have fostered responses from state-owned enterprises and global manufacturers, who strive to capture market opportunities in the growing NEV segment. As China’s NEV market is poised for further penetration, estimated to rise, leading competitors adopt strategic practices from BYD's success story, preparing for a future where smart driving becomes an industry standard.

BYD's vision includes bolstering cost control mechanisms while aggressively pursuing international market growth and progressively innovating in intelligent driving technologies. The challenges in navigating both domestic and international markets highlight the company's determination to maintain its leadership position despite evolving and relentless competition.