BYD launches 4nm driving chip and unlimited ADAS insurance

BYD's self-developed 4nm chip and unlimited ADAS insurance push intelligent driving into mass-market EVs as the company fights eight months of declining sales.

"The Xuanji A3 represents the highest level of intelligent driving chips in China," Chairman Wang Chuanfu said at an event in Shenzhen on Thursday. BYD is now the only automaker in the world with full control over its assisted-driving supply chain, he added, after investing more than 100 billion yuan ($14.7 billion) into semiconductors with a team of more than 7,000 engineers dedicated to chip research and development.

The Xuanji A3 delivers 700 TOPS of computing power per unit, with a three-chip cluster reaching 2,100 TOPS — enough to support Level 3 and Level 4 autonomous driving, Wang said. The chip uses roughly 20% less power than comparable semiconductors, according to BYD, and powers a new central computing platform that unifies the smart cockpit, driver-assistance system and electric propulsion into a single laptop-sized unit. BYD has introduced more than 2,000 chips since establishing its semiconductor division in 2002 and now owns five wafer fabrication facilities. The chip has entered mass production.

The insurance program covers direct economic losses from accidents while using God's Eye 5.0's urban navigation function, including repair costs, third-party property damage and personal injury liabilities. Unlike typical assisted-driving insurance products, BYD's coverage is free, carries no compensation cap and does not affect users' future premiums. The company said usage of its smart parking function rose from 21% to 93% after introducing a similar guarantee last year, with accident rates remaining near zero. BYD is also expanding the God's Eye system across all models, including the Seagull compact hatchback starting at 69,800 yuan ($10,300) — the first car in its class to receive LiDAR. The God's Eye B system is available as an option for 12,000 yuan ($1,670), which Wang described as cost-only pricing.

Why BYD is betting on intelligence

The technology push comes as BYD's financial results show the limits of competing on price alone. First-quarter net profit fell 55% to 4.09 billion yuan ($599 million) as a price war in China and a stronger yuan compressed margins. Revenue dropped 12% to 150.2 billion yuan. The company's sales have declined year on year for eight consecutive months, with April volumes down roughly 16% from a year earlier.

Exports have been the lone bright spot, rising more than 70% year on year to a record 135,098 units in April. BYD is targeting 1.3 million to 1.6 million international deliveries in 2026.

BYD has more than 3.15 million vehicles with advanced driver-assistance hardware on the road, generating roughly 200 million kilometers of driving data daily. The company uses that data to train its algorithms through cloud-based world models and reinforcement learning, with iteration cycles running every three days.

Competitive landscape and investor view

The Xuanji A3 approaches the capability of chips from Huawei Technologies, which currently produces automotive semiconductors at a 7nm geometry and has pledged to debut 1.4nm chips by 2031. The most advanced chip globally is TSMC's 2nm N2 node. BYD's ability to design and mass-produce its own 4nm driving chip deepens a vertical integration strategy that already spans batteries, motors and vehicle manufacturing — a structure no other global automaker has replicated.

Tesla launched its Full Self-Driving system in China this year after years of delays, though the technology still requires active human intervention and uses a vision-only approach without LiDAR. Chinese rivals including XPeng and NIO also offer urban navigation systems, but none have matched BYD's insurance-backed liability guarantee or its in-house chip production.

CLSA maintained its High-Conviction Outperform rating on BYD with a target price of HKD130, saying the new intelligent driving solution highlights BYD's leading technological capabilities and will help drive a sales recovery in the second half of 2026. BYD shares rose 2.3% on Friday in Hong Kong.

The strategy carries risk. BYD deployed God's Eye across millions of vehicles last year, and users reported malfunctions including unintended acceleration and erratic lane changes, according to media reports. The company's unlimited insurance pledge is a direct bet that its system is now reliable enough to underwrite. If confirmed, the combination of in-house silicon, mass-market LiDAR deployment and liability coverage could shift the competitive battleground in China's EV market from price to intelligence — a transition that would favor vertically integrated manufacturers with data scale.

This article is for informational purposes only and does not constitute investment advice.