BYD brings urban NOA down to models priced at Rmb78.8k and launches its self-developed 4nm intelligent driving chip

Overview

This report summarizes the key content of BYD’s “Intelligent Strategy Launch Event” on May 28, 2026. BYD unveiled the Xuanji and Satellite architectures, the God’s Eye intelligent driving system, and the DiDiXia Super AI Agent, and proposed three major goals: zero traffic accidents, the “Super Driver” autonomous driving system, and “Super Assistant” AI. Goldman Sachs maintains its Buy rating on BYD A/H shares, believing the company’s intrinsic capabilities in intelligent driving, chips, vehicle platforms, and overseas markets remain the core investment theme.

Core views

The core views are: first, God’s Eye B covers all vehicle models at an optional price of Rmb12k, bringing urban NOA capability to entry-level models priced at Rmb78.8k, which may expand intelligent driving penetration; second, the self-developed 4nm intelligent driving chip Xuanji A3 and the Xuanji/Satellite architectures strengthen vertical integration of software and hardware, helping reduce reliance on external suppliers and improve the cost structure; third, the DiDiXia Super AI Agent and open ecosystem enhance cockpit and user interaction capabilities; fourth, overseas expansion and a complete product matrix continue to support medium- to long-term sales and profit growth.

Analysis framework

The report mainly analyzes launch event information, product pricing and competitor configuration comparisons, intelligent driving hardware and software costs, option take-rates, vehicle sales forecasts, overseas profit contribution forecasts, and the DCF valuation framework. Goldman Sachs is focused on whether new technologies can translate into orders and deliveries, and when Xuanji A3 will be installed in vehicles.

Methodology notes

• Valuation methodsDCF

  12-month target price

  Goldman Sachs uses the DCF method, with WACC of 10.8% and TGR of 2.0%, to derive 12-month target prices of A-shares Rmb137 and H-shares HK$134, and applies a 10% discount to H-shares.

• Technology and CommercializationIntelligent Driving Penetration Analysis

  option price, take-rate, and margin

  Based on the Rmb12k optional price of God’s Eye B, the over-60% take-rate for the Seagull model, and the high gross margins of external chip suppliers, the report concludes that BYD’s rollout of intelligent driving to lower-priced models may increase installation rates and improve profitability.

• Factor FrameworkGS Factor Profile

  growth, financial returns, valuation multiples, and composite factors

  Goldman Sachs’ factor profile calculates percentiles using metrics such as sales, EBITDA, and EPS growth, ROE, ROCE, and CROCI, as well as P/E, P/B, and EV/EBITDA, to provide investment context for the stock relative to the market and industry peers.

Asset mapping & comparison

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

• BYD Co. A/H shares

  Core covered asset

  Strengths

  Leading NEV player, complete product matrix, strong in-house R&D and engineering capabilities, and a second growth curve in overseas markets.

  Weaknesses

  Faces intense EV competition, while commercialization of intelligent driving technology still needs validation through orders and deliveries.

  Comparison

  The 12-month forward P/E for A/H shares is below the historical average, and Goldman Sachs believes the valuation is attractive.

  Risks

  Intensifying EV competition, slower-than-expected overseas expansion, and lower-than-expected external battery sales.

• God’s Eye B urban NOA

  Lever for improving intelligent driving penetration

  Strengths

  Low optional price of Rmb12k, available across all vehicle models, and bundled with 1-year urban NOA safety liability protection.

  Weaknesses

  User experience, execution of liability protection, and actual penetration still require ongoing observation.

  Comparison

  The company said most LiDAR-equipped models are priced above Rmb200k, while BYD has reduced the entry-level price for urban NOA models to Rmb78.8k.

  Risks

  If user acceptance is insufficient or safety accidents undermine trust, take-rates and brand perception may come under pressure.

• Xuanji A3 intelligent driving chip

  Core evidence of in-house software and hardware capability

  Strengths

  4nm process node, targeting L3/L4 autonomous driving, already in mass production, and capable of improving computing utilization when paired with self-developed algorithms.

  Weaknesses

  The report has not yet disclosed a specific vehicle installation timeline or the pace of mass-production model rollout.

  Comparison

  Compared with reliance on external suppliers such as Nvidia or Horizon Robotics, a self-developed chip is expected to reduce costs and improve system integration efficiency.

  Risks

  Mass-production yield, vehicle validation, regulatory requirements, and the rollout pace of L3/L4 may affect realization of commercial value.

• Overseas business

  Medium- to long-term growth driver

  Strengths

  BYD has entered overseas markets with highly competitive and innovative products, and Goldman Sachs expects overseas contribution to rise significantly.

  Weaknesses

  There are uncertainties in overseas localization, channels, regulation, and the trade environment.

  Comparison

  Goldman Sachs expects overseas profit contribution to increase from 21% in 2024 to 76% by 2028E.

  Risks

  Slower-than-expected overseas expansion, geopolitics, and intensifying local competition.

Key data

• Report Date2026-06-01Publication date of the Goldman Sachs equity research report.
• God’s Eye B option priceRmb12kThe urban NOA function is now available as an option across all vehicle models.
• Entry-level urban NOA model priceRmb78.8kThe report calls it the most affordable urban NOA model in the China market.
• Seagull model God’s Eye B take-rate60%+Goldman Sachs uses this as a reference for improving intelligent driving penetration.
• Xuanji A3 chip process node4nmBYD’s first self-developed intelligent driving chip, targeting L3/L4 autonomous driving.
• Xuanji A3 status已进入量产BYD said the new chip has already entered mass production.
• Increase in computing utilization100%BYD said computing utilization doubled after combining its self-developed algorithms and architecture.
• NEV fleet size3.15mn unitsUsed to support physical AI large models and real driving data accumulation.
• Daily real driving data0.2bn km/dayUsed for long-tail scenario simulation and model training.
• Song Ultra DM-i starting priceRmb129.9kA new model launched on May 28, 2026.
• New DM-i system fuel consumption2.6 litre/100kmFuel consumption level disclosed by BYD.
• Sales forecast4.3mn units in 2024 to 7.1mn units in 2030EGoldman Sachs’ medium- to long-term forecast for BYD’s total vehicle sales.
• Incremental overseas sales contribution92% of incremental vehicle sales volume in 2024-2028EGoldman Sachs expects overseas markets to become the second growth driver.
• Overseas profit contribution21% in 2024 to 76% by 2028EGoldman Sachs expects a significant increase in the share of overseas profits.

Impact & implications

If the low-cost rollout of urban NOA and mass production of self-developed chips progress smoothly, BYD may accelerate the adoption of intelligent driving in the mass-market price segment, expand the installation rate of God’s Eye B, and reduce component costs through vertical software-hardware integration. For investors, short-term catalysts come from new technologies driving orders, deliveries, and model mix; medium- to long-term value depends on overseas market expansion, monetization of intelligent capabilities into margin improvement, and valuation recovery of A/H shares.

Risks

• Intensifying EV competition may compress pricing and margins.
• Overseas expansion may progress more slowly than expected, affecting realization of the second growth curve.
• External battery sales may come in below expectations, weakening non-vehicle profit contribution.
• The option take-rate or order conversion for God’s Eye B may fall short of expectations, causing the effect of intelligent driving rollout to lower-priced models to disappoint.
• There is uncertainty around the vehicle installation timing of Xuanji A3, mass-production stability, and regulatory progress for L3/L4.

What to watch

• The actual take-rate and user feedback for God’s Eye B across more vehicle models.
• The impact of new technology launches on orders, deliveries, and model mix.
• When Xuanji A3 will enter specific mass-production models and achieve scaled vehicle installation.
• Execution of urban NOA safety liability protection and accident data.
• Sales performance of the Song Ultra DM-i and the new Da Tang after launch.
• The rollout pace of overseas intelligent driving functions and progress in localized R&D.
• Quarterly results, gross margin changes, and valuation recovery of A/H shares.