BYD's potential intelligent strategy is worth looking forward to, with city NOA price downscaling as the key highlight

Overview

This report provides a preview centered on the potential "intelligent strategy launch event" for BYD on May 28, 2026, as reported by the media. Goldman Sachs believes that the market is most focused on whether BYD will further expand city NOA from high-priced models to lower price bands, as well as updates in intelligent-driving algorithms, in-house lidar and chips, intelligent chassis, and overseas intelligent-driving adaptation.

Core views

Goldman Sachs' core view is that if BYD can lower the standard city NOA price band to around Rmb150k and leverage its vertical integration capabilities to advance in-house 128-line lidar, an intelligent-driving chip roadmap, and cost optimization, it will strengthen the competitiveness of its mass-market products. Over the long term, overseas markets and continued technological innovation remain important support for the second growth curve, and the report maintains a Buy rating.

Analysis framework

The report uses an event-preview and peer-comparison framework: it first breaks down five categories of potential technological and commercial updates from the intelligent strategy launch event, then compares peers such as Leapmotor, Xpeng, NIO, Geely, Great Wall, and Li Auto in city NOA, world models, in-house chips, and overseas intelligent-driving adaptation, and finally combines sales forecasts, overseas contribution, and DCF valuation to form the investment conclusion.

Methodology notes

• Valuation methodDCF

  12-month target price

  Goldman Sachs uses DCF valuation, assuming a WACC of 10.8% and a perpetual growth rate of 2.0%, deriving 12-month target prices of Rmb137 for A-shares and HK$134 for H-shares, while applying a 10% discount to H-shares.

• Competitive analysisPeer price-band comparison

  Entry price for city NOA

  The report compares the lowest price bands for city NOA-equipped vehicles among BYD and brands such as Leapmotor, Great Wall, and Xpeng to assess BYD's mass-market competitiveness after pushing intelligent-driving features further downmarket.

• Technology roadmap analysisIntelligent-driving capability benchmarking

  End-to-end large models, world models, in-house chips, and sensors

  The report focuses on how BYD's God's Eye system can improve performance by combining end-to-end large models and world models, while also tracking in-house 128-line lidar, cooperation with NVIDIA and Horizon Robotics, and the roadmap for in-house intelligent-driving chips.

• Factor descriptionGS Factor Profile

  Growth, financial returns, valuation multiples, and composite percentiles

  The appendix explains that Goldman Sachs' factor framework compares stocks' growth, financial returns, valuation multiples, and composite attributes through standardized percentiles to provide investment context.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• BYD Co. A-shares 002594.SZ / H-shares 1211.HK

  Core covered target of the report

  Strengths

  Broad coverage of mass-market demand, strong vertical integration capabilities, in-house components and ongoing technological innovation capabilities, with overseas business expected to become the second growth driver.

  Weaknesses

  Domestic new energy vehicle competition is intense, and pushing advanced intelligent-driving functions further downmarket requires balancing cost, experience, and delivery pace.

  Comparison

  If standard city NOA is lowered to around Rmb150k, BYD will move closer to the competitive range of peers' low-price city NOA offerings, but it still needs to benchmark its intelligent-driving capabilities against Leapmotor, Xpeng, NIO, Geely, and others.

  Risks

  Intensifying EV competition, overseas expansion slower than expected, external battery sales below expectations, and intelligent-launch content or order feedback falling short of market expectations.

• Leapmotor

  Peer benchmark for city NOA price band

  Strengths

  The MSRP of the A10 505km lidar version with optional city NOA is Rmb86.8k, the lowest city NOA price mentioned in the report.

  Weaknesses

  The report does not elaborate on its profitability or scale advantages.

  Comparison

  Leapmotor forms a low-price anchor in city NOA entry pricing, serving as a price reference for BYD's push of intelligent-driving features downmarket.

  Risks

  The report does not provide specific risks for Leapmotor.

• Xpeng

  Peer benchmark for intelligent-driving technology

  Strengths

  Launched VLA2.0 in March 2026 and has already deployed its in-house Turing SoC in models such as the MONA M03, with 750 TOPS per chip.

  Weaknesses

  The report does not elaborate on its cost structure or sales performance.

  Comparison

  Xpeng is used as a key benchmark for BYD's intelligent-driving capability upgrade in world-model training, full-scenario capabilities, and in-house chips.

  Risks

  The report does not provide specific risks for Xpeng.

• Peers such as NIO, Geely, Li Auto, Great Wall

  Benchmarking in intelligent driving, world models, and overseas certification

  Strengths

  NIO plans two Nio World Model upgrades in 2026; Geely released the World Behavior Model at CES 2026 and obtained UN R171 certification; Li Auto's new flagship SUV is equipped with two M100 chips.

  Weaknesses

  The report does not elaborate one by one on these companies' financial or valuation weaknesses.

  Comparison

  These peers demonstrate the competitive direction in intelligent-driving algorithms, chip computing power, and overseas compliance certification. BYD needs to reduce costs and expand coverage through in-house development and scale.

  Risks

  The report does not provide specific risks for these peers.

Key data

• Report date2026-05-26The header on the main text page shows Equity Research 26 May 2026.
• RatingBuyThe report states that both BYD A/H shares are rated Buy.
• 12-month target priceA-shares Rmb137; H-shares HK$134Based on DCF valuation, with a 10% discount applied to the H-share target price.
• Disclosed prices in the reportA-shares Rmb95.96; H-shares HK$91.60Used for a simple estimate of target-price upside.
• Simple estimated upsideA-shares about 42.8%; H-shares about 46.3%Calculated by dividing target price by the disclosed price in the report, without including dividends or total return adjustments.
• Potential standard city NOA price bandabout Rmb150kMedia reports indicate that BYD may lower the entry price for city NOA from above Rmb200k currently to around Rmb150k.
• Current optional city NOA caseSeagull 305km Free Edition Rmb78.9k, optional package Rmb12k, effective price Rmb90.9kThe optional package includes one lidar, one Orin-X SoC, and God's Eye B intelligent-driving software.
• 2026E domestic sales forecast3.3mnGoldman Sachs expects domestic sales in 2026 to decline 8% year over year, recovering relative to the 52% year-over-year decline in 1Q26.
• Potential intelligent R&D investmentabout Rmb100bn over the next three yearsFrom media reports, this is the scale of intelligent-strategy investment that investors are focusing on.
• Long-term sales outlookfrom 4.3mn in 2024 to 7.1mn by 2030EGoldman Sachs believes a full product portfolio and in-house capabilities support continued technological innovation and sales growth.
• Overseas business contributionContributes 92% of incremental sales in 2024-2028E; overseas profit contribution rises from 21% in 2024 to 76% in 2028EThe report views overseas markets as BYD's second growth driver.

Impact & implications

If the launch event delivers on lower-priced city NOA, mass production of in-house components, and overseas intelligent-driving adaptation, BYD may build stronger intelligent cost-effectiveness in the mass-market price segment, ease domestic competitive pressure, and improve medium- to long-term profit elasticity through overseas expansion. Short-term stock-price reaction will also depend on weekly order momentum after the launch and consumer acceptance of the new features.

Risks

• Intensifying competition in new energy vehicles may compress pricing and profit margins.
• Slower-than-expected progress in overseas expansion may affect delivery of the second growth curve.
• Lower-than-expected external battery sales may drag on business growth.
• If the content of the potential intelligent strategy launch falls short of market expectations, it may affect short-term sentiment.
• If pushing city NOA downmarket brings cost pressure or unstable user experience, it may weaken the expected competitiveness improvement.

What to watch

• Whether the potential intelligent strategy launch event on May 28, 2026 will take place as reported by the media.
• Whether city NOA will be lowered to around the Rmb150k price band, and whether it will be standard or optional.
• The specific capability improvements of the God's Eye system in end-to-end large models, world models, and mapless city NOA.
• The mass-production timeline of in-house 128-line lidar, cooperation with NVIDIA and Horizon Robotics, and the roadmap for in-house intelligent-driving chips.
• Whether the DiSus intelligent chassis 2.0 and DiSus-C can be launched in the Rmb100k-150k price segment.
• Intelligent-driving adaptation solutions and overseas data-center plans for overseas markets such as Europe and Southeast Asia.
• Weekly order momentum after the release of the technology and new models.