On February 10, 2025, BYD held an intelligent strategy conference at its Shenzhen headquarters, officially unveiling the "TianShenZhiYan" advanced intelligent driving system. This marks another milestone for BYD in the realm of autonomous driving technology. The system will be integrated across BYD's entire model range, from entry-level to high-end vehicles, encompassing models like the Seagull and Qin PLUS DM-i. This strategic deployment not only highlights BYD's prowess in intelligent driving but also promises substantial growth opportunities for the associated industrial chain.

Notably, from the high-end Yangwang U8 priced at over a million yuan to the budget-friendly Seagull intelligent driving version at 69,800 yuan, all models will come equipped with high-speed NOA (Navigation on Autopilot) functionality as standard. Historically, lidar, a crucial component in intelligent driving systems, has been prohibitively expensive. Automakers have engaged in a sensor arms race, stacking hardware to showcase their technological prowess, making intelligent driving a seemingly unaffordable luxury for the masses.

However, BYD's "TianShenZhiYan" system disrupts this narrative. While other automakers have attempted to lower the barrier to entry with lower-cost vision-only solutions, their impact pales in comparison to BYD's innovation. BYD has democratized high-end technology, previously reserved for luxury models, by integrating it into more affordable vehicles, potentially benefiting a broader consumer base.

A CITIC Securities research report projects that the penetration rate of mid-to-high-level intelligent driving in China is expected to double by 2025, fueling a 35 billion yuan incremental market. The chip, control, sensing, and connectivity sectors are all poised to benefit, with chips and controllers demonstrating greater versatility and a promising outlook. As domestic automakers are anticipated to roll out competitive intelligent driving strategies by 2026, the industry's growth trajectory is expected to intensify over the next two years. Currently, investors are advised to focus on BYD's supply chain and the localization of chips.

As BYD's TianShenZhiYan redefines the market landscape, the author has curated a list of TianShenZhiYan concept stocks for investors' consideration. Please note that this list does not constitute investment advice.

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