The remarkable ascent of BYD’s stock has captured the attention of the financial world, signifying strong market confidence in the company’s ventures into the realm of smart driving technologyWhat was once merely a promising future for the company is now becoming a palpable reality, as seen through its recent stock performance.

On Tuesday, BYD's H-share reached an astonishing new peak, temporarily climbing 4.5% during intraday tradingThis performance followed a consistent upward trend, showcasing a three-day streak of gains that even pushed the stock into overbought territoryThe staggering climb of over 20% year-to-date catapulted the company’s market value to an impressive $132 billion, surpassing the combined market capitalization of traditional automotive titans such as Ford, General Motors, and StellantisSuch figures not only demonstrate BYD's strong pull in the capital markets but also reflect investor optimism regarding its future trajectory.

In stark contrast, Tesla's stock experienced a notable decline of 13% over the same periodWhile BYD has achieved significant milestones in terms of share price and market valuation, it remains crucial to acknowledge that its valuation still trails Tesla’s considerablyCurrently, BYD's projected price-to-earnings ratio stands at approximately 18 times; this figure is not only below its five-year historical average but also less than a fifth of Tesla's valuationThis discrepancy means that there’s ample room for BYD’s valuation to grow as market expectations evolve.

What has generated significant buzz in the market is BYD’s recent unveiling of its advanced driving system, which has caused ripples akin to a stone tossed into a tranquil lake and ignited discussions of a new pricing war within the industry

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At a lavish launch event held at its Shenzhen headquarters, BYD announced a bold strategy: all models priced above 100,000 RMB would be equipped as standard with the "Eye of God" intelligent driving assistance system, extending this innovative feature to several lower-end models as well, including the Seagull.

Chairman Wang Chuanfu boldly proclaimed that 2025 would be the "Year of Universal Smart Driving." His forecast was ambitious, predicting that within the next two to three years, intelligent driving features could become as ubiquitous as seatbelts or airbags in vehiclesAdditionally, BYD revealed a pivotal strategic plan to integrate AI software from DeepSeek, which will amplify its capabilities in the smart driving arena, promising users an increasingly intelligent and convenient transportation experience.

Morgan Stanley analyst Tim Hsiao provided insightful observations regarding BYD’s trajectory, suggesting that the rapid introduction of new models and robust smart driving capabilities could place competitors in a challenging position regarding timely technological and product updatesMeanwhile, Jefferies analysts underscored the potential for BYD’s initiatives to expedite the adoption of autonomous navigation features in the mass market, likely triggering an upgrade wave among current users.

Furthermore, the implications of BYD’s intelligent driving updates could spark a noticeable price war effectIn a sense, this could be viewed as a unique "price drop without a price drop," leveraging smart feature upgrades as a facade to encompass nearly the entire BYD brand lineupThe response from the market was profound, as other automotive stocks faced significant losses in the wake of BYD’s announcementGeely's stock plummeted around 10%, while shares for Xiaopeng, Great Wall, and Li Auto fell by 9%, 7%, and 6%, respectively

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