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China’s BYD Cuts Entry Price for Smart EVs, Sparking Potential Price War

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China’s electric vehicle giant, BYD, made waves on Monday by launching its advanced autonomous driving features on a wide range of models, with prices starting as low as $9,555. This aggressive move, which analysts predict will ignite a price war, significantly undercuts competitors like Tesla. BYD now offers its proprietary “God’s Eye” advanced driver-assistance system (ADAS) on models priced above 100,000 yuan ($13,688), with three models priced below 100,000 yuan, starting at just 69,800 yuan for the Seagull. These new models went on sale immediately following the event.

Previously, BYD only included these high-tech features in EVs priced from $30,000. In comparison, Tesla offers similar features in China on vehicles starting at $32,000. This shift marks a significant democratization of technology, as BYD aims to make smart driving accessible to a broader audience. “Technology does not need to be high-end, and they can fight a price war here,” said Yale Zhang, managing director at Automotive Foresight.

BYD’s move is likely a strategic response to sales plateauing, as the company reached 4 million units sold last year. Industry expert John Zeng from GlobalData believes that smart driving technology could elevate BYD’s sales and put pressure on competitors, especially brands like Xpeng, which may struggle to offer similarly priced EVs with comparable smart features.

The introduction of these affordable smart driving cars comes after a period of aggressive price cuts by BYD, which had already stirred a price war in China’s automotive market. Shares of BYD surged 16% after reports of the smart driving plans surfaced. The company’s founder, Wang Chuanfu, suggested that smart driving will become as essential as seatbelts and airbags, pushing China’s AI-driven auto industry forward. The integration of DeepSeek’s AI models into BYD’s Xuanji smart car platform adds an additional layer to its technological advancements.

Mobileye Predicts Lower 2025 Revenue Amid China Market Challenges

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Mobileye has forecast lower-than-expected revenue for 2025, citing continued weakness in the Chinese market due to increasing competition from local self-driving technology providers. The company expects revenue between $1.69 billion and $1.81 billion, falling short of the $1.94 billion analyst consensus from LSEG data.

Chinese manufacturers have been developing their own advanced driver-assistance systems (ADAS) at lower costs, limiting Mobileye’s shipments to the region. In December, the company noted that its major automotive customers were losing market share in China as local automakers ramped up production of more affordable electric vehicles (EVs).

While shipment volumes of Mobileye’s EyeQ chips in China have improved compared to 2024, they remain sluggish, executives stated in a post-earnings call on Thursday. The recent reintroduction of Chinese government EV subsidies could stimulate demand, but the impact remains uncertain.

Despite these challenges, Mobileye reported fourth-quarter revenue of $490 million, surpassing the $477.8 million estimate but marking a 23% decline from the previous year. The drop was attributed to lower demand for its EyeQ chips as automakers continue to work through excess inventory.

Looking ahead, Mobileye remains optimistic about 2025, stating that its ongoing tests with potential customers for its assisted driving technology “will bear fruit” next year. The company also dismissed concerns that legacy automakers will fully develop their own in-house driver assistance systems, as many are reassessing their EV strategies amid slowing demand.

On an adjusted basis, Mobileye posted earnings of 13 cents per share in the fourth quarter, exceeding estimates of 11 cents. However, gross profit declined by 30% during the same period.