BYD’s Possible Sputnik Moment

BYD will have a mobility event on Monday. The market expectation is it will announce the progress it has made in delivering autonomous driving. The market is waking up to the possibility we are on the cusp of another DeepSeek-like announcement.

It’s been almost a decade since the initial excitement around self-driving. In that time several startups have gone bust or been acquired. The two most notable survivors are Tesla and Alphabet. GM bought Uber’s failing program and there are several much smaller ventures still struggling to make progress.

The biggest challenge is that despite the billions spent, the progress on achieving full self-driving has been painfully slow. The lack of a breakthrough innovation has also contributed to the slow pace of regulatory change.

Tesla’s approach to full self-driving is to fake it till you make it. There is no question the company has the most impressive driver-assist technology. However, driving on highways with ease is not the same as driving on the streets where the number of risks escalates exponentially.

Alphabet’s Waymo has taken a more cautious approach. They have diligently mapped every potential route in their target markets and trained the vehicles to be very conservative. That slowly slowly approach is responsible but is not the “move fast and break things” model that attracts exorbitant valuations.

The big question now is whether Chinese companies are going to leapfrog their capabilities? After the ignominy of DeepSeek completing tasks at a fraction of the cost of development, if BYD is a better autonomous driving company than Tesla there is going to be a massive reassessment of the valuation mismatch between the two companies.