For a long time, the competition between Tesla and BYD focused primarily on who could claim the title of “Sales King” in the electric vehicle market, but entering 2025, the battle between the two giants has quietly shifted toward the autonomous driving field.
With autonomous driving becoming the new battleground in China’s EV market, the Tesla-BYD rivalry has evolved from a simple sales race to a comprehensive competition in autonomous driving technology, and BYD’s significant price advantage now poses a serious challenge to Tesla, according to a recent report by Barclays analysts led by Jiong Shao.
The shift in focus began with the launch of BYD’s “God’s Eye” autonomous driving system in February. Previously, Tesla’s FSD (Full Self-Driving) was widely considered the most advanced L2+ autonomous driving system, far superior to BYD’s driver-assist products in China, however, with the introduction of “God’s Eye” system, the previous market landscape was completely disrupted, the analysts note.
While Tesla still leads in autonomous driving technology, it faces both regulatory challenges and intense competition in the Chinese market, and moreover, Tesla’s FSD system is priced at 64,000 yuan, while BYD offers its “God’s Eye” system for free, making Tesla’s system much less competitive in terms of pricing, they say.
BYD’s “God’s Eye” System: Free and Accessible
Earlier this month, BYD officially launched its autonomous driving system “God’s Eye” in China. The system is divided into three levels (A, B, and C), with varying functions and sensor configurations:
- Level A is equipped in high-end models like the Yangwang series and includes three LiDAR sensors.
- Level B is used in high-end BYD models and the Tengshi brand, featuring one LiDAR sensor.
- Level C, which covers all BYD vehicles, uses only cameras.
The C-level system, a more accessible driver-assist system, is primarily used in mid-range and entry-level models and is offered entirely for free to consumers. Barclays believes this strategy significantly lowers the threshold for adopting autonomous driving technology, allowing BYD to rapidly expand its market share of autonomous vehicles.
According to Barclays’ estimates, vehicles equipped with the “God’s Eye” system account for about 60% of BYD’s total sales in 2024. Based on BYD’s 2025 sales target of 5.5 million units in 2025, the company alone will contribute around 3 million vehicles with NOA (Navigation on Autopilot) features. In contrast, reports suggest that the total number of vehicles with NOA support sold in China in 2024 was around 2 million.
In terms of data and cloud computing, BYD collected about 72 million kilometers of driving data daily in 2024, and is expected to exceed 150 million kilometers per day by the end of 2025. However, in terms of computational power, BYD still lags behind domestic competitors and is much further behind Tesla, which has around 100+ EFLOPS of computing power.
Tesla’s Challenges in China Market
As the pioneer of autonomous driving technology, Tesla’s FSD system has long been regarded as the industry benchmark in the US market. However, in China, Tesla faces numerous challenges. The bank highlights:
- Technical Limitations: The biggest hurdle for Tesla in China is regulatory. Due to Chinese regulations, Tesla cannot transmit data from its Chinese fleet back to the U.S. for training, which has led to its FSD system struggling to adapt to the local market. This limitation significantly reduces Tesla’s technical advantage in China.
- Regulatory Environment: The regulatory landscape has also created significant challenges for Tesla, increasing its operational costs and limiting the widespread adoption and application of its technology.
- Market Competition: In addition to these challenges, market competition is another critical factor. Unlike the U.S., the competition in the Chinese market is fierce, with many local OEMs offering similar systems at lower or no cost.
For example, BYD’s “God’s Eye” system is not only powerful but also completely free, making Tesla’s FSD system much less competitive in terms of price. Tesla’s FSD is priced at 64,000 yuan (about $8,800), far higher than BYD’s free offering, which could affect its market acceptance.
Autonomous Driving Competition Intensifies in the Next Three Years
With the continued development of autonomous driving technology, Barclays forecasts:
- By 2025, urban autonomous driving features (L2+) will begin to become widespread, with full adoption expected by 2026. By 2026, urban autonomous driving (L3) will start to be commercialized, thanks to: 1) the reduction in LiDAR prices, and 2) improvements in vision-based systems.
- By 2027, urban autonomous driving features will continue to evolve and slowly transition to L3+, meaning that drivers will almost never need to take control during regular driving.
This trend signals increasing competition in the market, and BYD, with its price advantage and rapid technological iteration, is well-positioned to capture a competitive edge in the future market.