New changes in the global car market, BYD rewrites the game rules with 'cabbage price technology'

BYD is beating its competitors and even disrupting the entire automotive industry by offering advanced driver assistance systems (ADAS) as standard and free of charge.Track Link Sk200-8

Seat belts and airbags used to be optional features in cars, even exclusive luxury configurations for high-end models, but now we dare not drive on the road without them. The safety features have also evolved from high-end configurations to industry standards, and car companies can no longer charge extra for them.Track Link PC200-5

Nowadays, autonomous driving technology may be undergoing the same transformation, and BYD is driving this change, forcing the entire industry to take action. As the world's largest electric vehicle manufacturer, BYD is making advanced driver assistance systems a standard feature on most models at no additional cost.Track Link Ec210,

For many years, car manufacturers have regarded driver assistance software as the key to offsetting the decline in hardware profits. This is expected to become a lucrative business, just like technology companies earning huge revenues through high profit cloud services. For example, as of April 2024, Tesla charges up to $8000 for its driver assistance software in the United States. Many car companies such as Mercedes Benz and General Motors also hope to achieve profitability through assisted driving technology.

Autonomous driving software does have inherent risks, ranging from technical failures to potential cybersecurity risks. However, unlike fully autonomous vehicle that are still controversial and have not been verified on a large scale, advanced driving assistance systems are designed to enhance rather than replace human control, and their value has been fully demonstrated.

Research has shown that advanced driving assistance systems, including highways and traffic assistance systems, automatic emergency braking, and forward collision warning, can significantly improve road safety levels. A study by the Insurance Institute for Highway Safety (IIHS) shows that vehicles equipped with these features can reduce rear end collision rates by up to 50%. Research in the UK also suggests that if these systems are applied more widely, the frequency of accidents could be reduced by about a quarter, while full deployment could reduce the most common types of accidents by 29%.20Y-32-00014

Assuming a conservative adoption rate of 30% and a fee of $5000 per vehicle, for a car company with an annual sales volume of 10 million vehicles, the autonomous driving function alone may generate $15 billion in revenue annually. Some car manufacturers have also introduced subscription models: for example, Tesla charges $99 per month, which helps generate long-term recurring revenue after the vehicle is sold.Factory Track Guard Link

With the advancement of technology and the reduction of consumer doubts, if the adoption rate further increases, its financial potential will become even more attractive. This also explains why car companies are so keen on monetizing this technology. The security feature is indeed a big selling point, but the question is: can it still be used as a paid configuration?

BYD has made this question even more difficult to answer. By making advanced driving assistance systems a standard feature on most models, even including the $9500 Seagull electric car, BYD is challenging the pricing strategies that its competitors rely on for survival.

In the market where BYD comes standard with advanced driving assistance systems, car manufacturers will find it increasingly difficult to justify their software fees. And the long-term impact may be more disruptive. If BYD's measures force its competitors to significantly reduce software prices or even completely abandon the paid model, then the AI driven, high gross profit model in the automotive industry may never be realized.

Not all markets will be equally affected. In the United States, due to intensified technological competition between China and the United States, and BYD's small market share, there is a high possibility of imposing restrictions on its driving software on the grounds of national security. Such measures will effectively protect the software driven sales of American car companies from direct impact.

But this can only delay the inevitable trend. BYD's global expansion momentum is accelerating. In the UK, BYD's sales in January exceeded Tesla's, increasing six times year-on-year, while Tesla's sales decreased by 8%. In Singapore, BYD has surpassed Toyota to become the best-selling car brand in the country, including both electric and gasoline vehicles. In Brazil, BYD's sales increased fourfold in 2024.Excavator Spare Parts

Nowadays, every time BYD enters a new market, it not only sells more cars, but may also redefine industry expectations. History has shown that once a technology becomes indispensable, its premium disappears. Electric windows, anti lock braking system, and reverse camera, all of which were once high-end features, have now become standard equipment. Once consumers become accustomed to a certain feature as standard, they can never look back, just like seat belts.