Competition among Chinese electric vehicle (EV) makers is shifting from price cuts to AI and autonomous driving upgrades as softer demand after subsidy changes and tighter regulation make discounting less effective, Morgan Stanley said.

Tim Hsiao, head of Greater China auto and shared mobility research at Morgan Stanley, said carmakers are likely to push conditionally autonomous Level 3 systems beyond today’s Level 2 and Level 2+ features.

He made the forecast even as China’s EV market weakened following adjustments to trade-in subsidies and the phaseout of some incentives from 2026.

At a Shenzhen press conference, BYD founder and chairman Wang Chuanfu said the EV maker had launched a self-developed 4-nanometre intelligent-driving chip supporting Level 3 and Level 4 autonomous driving.

The company planned to invest more than 100 billion yuan (US$14.8 billion) in research and development.

China has begun limited Level 3 piloting in designated parts of Beijing and Chongqing rather than a broad commercial rollout.

🔗 Source: South China Morning Post

Recent BYD developments