The dawn of widespread intelligent driving capabilities is on the horizon, with industry leaders setting the pace for what could be a revolutionary shift in automotive technology. On the evening of February 10, Wang Chuanfu, the chairman of BYD, unveiled plans for the company’s high-level intelligent driving system named the "Eye of the God," which will be integrated into 21 of its models, priced between 69,800 and 249,800 yuan. This announcement not only marked a significant milestone for BYD but also introduced the concept of "intelligent driving equality,” a novel idea aiming to make advanced driving technologies accessible to a broader audience.

The backdrop to this technological leap is the automotive industry’s formidable transformation, characterized by rapid advancements in artificial intelligence and sensor technology. Just days before the unveiling of the Eye of the God system, BYD’s stock soared, indicating heightened investor confidence and anticipation surrounding this new technology. Stocks of related companies—such as Yutong Optical and Tongda Electronics—surged alongside BYD, demonstrating a ripple effect across the market.

Industry analysts widely believe that BYD’s recent moves will accelerate the adoption of advanced driving technologies, compelling other manufacturers to rethink their strategies and timelines for integrating similar technologies. The era of widespread intelligent driving is approaching, which is expected to significantly benefit suppliers of essential components like lidar and domain controllers. This collective momentum has already been reflected in stock prices, with companies like Lichuang Electronics achieving multiple consecutive days of stock price increases, essentially riding the coattails of BYD’s innovations.

What does the future hold for intelligent driving technology?

In the recently held strategy conference, BYD’s focus heavily tilted towards the capabilities of its Eye of the God C intelligent driving system. This comprehensive system features an expansive array of sensors, including 12 cameras, five millimeter-wave radars, and 12 ultrasonic radars. Notably, the Eye of the God C system promises features such as highway navigation with automatic lane changing (NOA), intelligent parking, and urban memory navigation—which will be enabled through over-the-air updates by the end of 2025.

The launch of the Eye of the God system is poised to cascade across the intelligent driving landscape, prompting a substantial shift in the industry. Analysts at Hualong Securities have noted that advancements in technology, cost-effectiveness, and market conditions could rapidly amplify the penetration rate of advanced intelligent driving systems, potentially leading to a landmark year for intelligent driving equality in 2025. By establishing a presence in the market for mid-price electric vehicles, BYD is strategically placed to drive this movement forward.

While some financial observations suggest that BYD is merely following in the footsteps of other innovators regarding intelligent driving capabilities, the reality is that the company plays a pivotal role in enhancing the sector’s adoption rates. BYD’s announcements in early 2023, regarding competitive pricing for electric vs. internal combustion vehicles, showcase its influence on industry trends. As the price range of 100,000 to 200,000 yuan becomes increasingly competitive due to the incorporation of the Eye of the God C across its entire model lineup, expect a flurry of responses from rival manufacturers.

Unraveling the impact on stock markets and investment.

BYD's intelligent driving vision sparked a robust wave within the A-share market, igniting remarkable price increases in related stocks. At one point, BYD’s stock crossed the 340 yuan threshold, setting new benchmarks for 2023. As investors gauge the long-term implications of the intelligent driving system, analysts are bullish on its potential to solidify BYD's standing in the auto industry, positively influencing future valuations and earnings. Firms like Kaisheng and Guosheng have responded to this dynamic environment by raising their profit expectations for BYD, reflecting confidence in its trajectory.

Other notable stocks have also surged, with Lichuang Electronics achieving consecutive trading limits within just four days, underlining the excitement around intelligent driving concepts. Other companies in the sector, such as Desay SV and Yutong Optical, are experiencing notable price movements, invoking interest among investors keen on identifying the next big opportunity in the automotive technology realm.

Emerging opportunities within the intelligent driving ecosystem.

As BYD’s Eye of the God system gains traction, the demand for various components critical to intelligent driving—such as sensors, computing platforms, and execution systems—is set to rise sharply. Suppliers that provide key parts, including cameras, lidar, and braking systems, will find themselves at the forefront of this trend. Moreover, startups and established firms providing software services or algorithms tailored to intelligent driving will likely capitalize on the increased demand stemming from BYD’s innovations.

For instance, Lichuang Electronics stands out as a major supplier of camera modules, which represent a crucial element in enabling intelligent driving perception. Meanwhile, Boulon Technology, recognized for its development of automotive intelligent driving sensors, is also a key contributor, supplying multiple types of sensors to BYD.

Furthermore, Desay SV, a manufacturer of intelligent driving domain controllers, plays an essential role by providing the component responsible for the advanced vehicle control that BYD aims to achieve. KiTech, focusing on automotive electronic products, contributes a variety of electronic components, including intelligent driving assistance systems.

As the market adjusts, 33 stocks associated with both BYD and the broader self-driving sector have emerged as potential beneficiaries. These stocks show promise based on analysts' predictions of robust net profit growth exceeding 30% in the upcoming years, with firms like Boulon Technology, Zhongke Chuangda, Meige Intelligent, Ruiming Technology, and Feirongda being highlighted.