BYD Stock Rises to Record Highs After It Launches Self-Driving With DeepSeek

BYD stock has risen to a record high while other electric vehicle (EV) stocks are down today after the Chinese new energy vehicle (NEV) company released an assisted driving system in partnership with DeepSeek – the Chinese startup that made waves with its low-cost artificial intelligence (AI) model.

The driving system which is named “DiPilot” would be offered free along with BYD cars. This would make BYD the only automaker offering assisted self-driving in cars priced below $10,000.

BYD Is the World’s Biggest NEV Seller

Notably, BYD is already the world’s biggest seller of NEVs even as it trails Tesla slightly when it comes to battery electric vehicles (BEVs). Sales of NEVs which include both BEVs and hybrids have been quite strong in China and over half of the cars sold in the country are now from the category.

BYD sold around 4.3 million cars in 2024 of which 58% were hybrids. In 2023, hybrids accounted for less than half of BYD’s total deliveries but the contribution has increased meaningfully over the last year. BYD now dominates the Chinese NEV market and the Berkshire Hathaway-backed company has also been looking at international markets to further fuel its growth. Notably, in 2011 Tesla CEO Elon Musk laughed at the possibility of BYD becoming a competitor to Tesla. However, the Chinese company has proven critics wrong and offers EV models at quite competitive prices.

DeepSeek Partnership Could Help Drive Volumes for BYD

DeepSeek anyways created a storm with its low-cost AI model which the company says it developed at a fraction of what Western rivals like OpenAI build their models for. Through the partnership with DeepSeek, BYD might be able to disrupt the EV industry also as no other player offers advanced self-driving features at this price range.

Analysts believe that BYD offering assisted driving features in budget cars would help increase EV adoption in China which is anyways the world’s biggest market for electric cars. In his note, Jefferies analyst Johnson Wan said, “BYD has now gone from 0 to 1 in [autonomous driving] development, which will accelerate the adoption rate of the function in the mass market and lead to a wave of upgrades by existing users.”

Tu Le, founder and managing director of Sino Auto Insights said that “The DeepSeek integration is very significant.” He added, “now there’s a homegrown standalone AI technology that BYD can work with to offer equivalent intelligent features offered by their competitors.”

According to Tu, “This puts BYD firmly back in the driver’s seat dictating the pace” of technological features.

BYD Could Trigger Another Price War in China

Meanwhile, there are fears of a price war in the autonomous driving space in China. “Looking ahead, we expect more Chinese local automakers to follow suit and offer low-cost autonomous driving solutions and features in 2025,” said Deutsche Bank analyst Wang Bin in a note.

Notably, there is already a fierce price war in the Chinese EV market as companies have been cutting prices and offering incentives to spur sales. The Chinese auto market is among the most competitive globally and domestic players are increasingly taking market share from foreign brands like Volkswagen and Ford.

Xpeng Motors Stock Falls Sharply

While BYD stock has risen to a record high today, there is selling pressure on other EV names, especially Xpeng Motors. The company offers one of the most advanced self-driving features in China. While releasing its January deliveries, the company said, “XNGP’s monthly active user penetration rate in urban driving reached 87% in January 2025.

Xpeng Motors delivered 30,350 vehicles in January which was up 268% compared to the corresponding period last year. While the steep rise was also due to a lower base as the company had delivered fewer than 10,000 vehicles in January 2024, the performance nonetheless looks encouraging.

Tesla Stock Is Also Lower Today

Tesla incidentally does not offer its full self-driving (FSD) features in China. While Tesla expected regulatory approvals in China by the end of 2024 and was looking to offer FSD in the country from Q1 2025, it hasn’t been able to secure the approvals so far.

The name FSD is misleading though as while the software is quite advanced, it is not L4 fully autonomous as the name might suggest. The nomenclature has been a point of contention with US regulators who accuse the company of deceptive marketing.

Meanwhile, last year Tesla launched its “Actually Smart Summon” feature in China. The feature is available in vehicles that have full self-driving (FSD) and enhanced autopilot features and was rolled out through an over-the-air update. The feature allows the car to move from the parking lot to the place where it is “summoned”.

Musk believes that the bulk of Tesla’s valuation comes from the company’s autonomous driving business. The company currently charges $8,000 for FSD subscription and CEO Elon Musk once said that the price for the service could rise to as high as $100,000 someday. That said, the company has had to cut the price by nearly half to boost adoption. With BYD offering assisted driving service for free, it remains to be seen whether other players also cut prices on their autonomous driving software.

Tesla Is Working on Self-Driving Cars

For nearly a decade now, Musk has been promising full self-driving almost every year. In 2023, he said that he would be “disappointed” if the company did not hit the milestone by the end of this year – which it eventually did not.

While Tesla has missed several self-imposed deadlines for full autonomy, Musk is quite categorical that it’s an aim that Tesla continues to strive for. “If somebody doesn’t believe Tesla’s going to solve autonomy, I think they should not be an investor in the company,” said the billionaire during the Q1 2024 earnings call last year.

Tesla is looking to test its robotaxi service in the US this year. The robotaxi service would be a test for the company’s self-driving capabilities which Musk believes is the key driver of the company’s mammoth valuations.