BYD Unveils Self-Developed Chip and L4 Autonomous Driving Platform

Overview

Deutsche Bank released a company update report on BYD, focusing on its latest breakthroughs in intelligent driving, including the launch of the self-developed 'Xuanji A3' chip, upgrades to the 'Eye of Heaven' autonomous driving platform, and the financial guarantee plan for urban Navigation on Autopilot (NoA). The report believes these technological advancements will solidify BYD's competitive edge in autonomous driving, maintaining a 'Buy' rating with a 12-month target price of HKD 127.5.

Core views

On May 28, BYD unveiled its self-developed 'Xuanji A3' autonomous driving chip, utilizing a 4nm process that delivers 2100TOPS computing power in a three-chip cluster while consuming 20% less power than competitors. The chip supports L3/L4 autonomous driving, marking a major milestone in BYD's smart vehicle strategy. The concurrently launched 'Eye of Heaven 2.0' architecture integrates cabin, driving, and electrical control functions into a central domain control unit, reducing system latency to 8 microseconds, 80% lower than industry average. The sensor system has been comprehensively upgraded: LiDAR angular resolution improved by 1.6x, 4D millimeter-wave radar maximum detection range extended to 400 meters, and ultrasonic radar latency reduced by 30%. BYD also introduced the 'Dipilot 300' package for urban NOA, priced at RMB 12,000, which includes 1 LiDAR and 30 perception units, with a commitment to cover all accident-related financial losses during the first year of using the CNOA feature.

Analysis framework

The report evaluates BYD's progress in intelligent driving from both technical parameters and market competition perspectives. By comparing the 'Xuanji A3' chip's performance metrics with competitors like NIO and XPeng, it analyzes its advantages in computing power and energy efficiency. It also examines innovations in sensor fusion, algorithm optimization, and data accumulation within the 'Eye of Heaven' platform, particularly the support provided by daily 200 million kilometers of data from 3.15 million intelligent driving vehicles for system iteration.

Methodology notes

• Industry Analysis FrameworkSupply-demand framework

  Supply-demand dynamics of autonomous driving chips

  The report analyzes the trend of automakers developing their own chips, noting it as key to achieving deep hardware-software integration and establishing competitive advantages in advanced autonomous driving

• Company Fundamentals & Financial FrameworkEconomic Moat/Competitive Advantage

  Advantages of vertical technology integration

  BYD builds competitive barriers through self-developed chips and full-stack technology development. The report focuses on evaluating the performance improvements and cost advantages brought by this vertical integration strategy

Asset mapping & comparison

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

• BYD (1211.HK)

  Direct beneficiary of intelligent driving technological advancements and commercialization prospects

  Strengths

  Full-stack self-development capability, massive data accumulation, vertical integration advantages

  Weaknesses

  Potentially weaker algorithm accumulation compared to tech companies specializing in autonomous driving

  Comparison

  New automakers like NIO and XPeng are also developing their own chips, but BYD has advantages in production scale and cost control

  Risks

  Technology iteration risks, regulatory limitations, consumer acceptance

Key data

• Current Price90.30 HKDClosing price on May 28, 2026
• Target Price127.50 HKD12-month expectation, implying 41% upside
• Xuanji A3 Chip Computing Power2100 TOPSIn three-chip cluster configuration
• System Latency8 microseconds80% lower than industry average
• Intelligent Driving Fleet Size3.15 million vehiclesGenerating 200 million km of daily data

Impact & implications

The report believes BYD's technological breakthroughs will accelerate the commercialization of advanced autonomous driving, particularly in complex urban scenarios. The development of proprietary chips not only enhances system performance but also reduces dependence on external suppliers. The financial guarantee plan for urban NOA may become a differentiated selling point to attract consumers, helping boost sales of intelligent driving optional packages.

Risks

• Slower-than-expected commercialization of autonomous driving technology
• Intensified industry competition leading to pricing pressure
• Risks in chip production yield and cost control

What to watch

• Actual usage data of urban NOA functionality
• Progress in mass production of Xuanji chips
• Penetration rate of intelligent driving optional packages