Al Root

Chinese electric vehicle maker BYD is giving something away. Instead of delighting customers, it seems to have annoyed them, showing how hard it is to price cars and satisfy everyone as artificial intelligence makes them better.

On Monday evening, Reuters reported that Tesla competitor BYD had been flooded with complaints after it announced that its most advanced driver assistance products would be essentially free on all its new models, no matter the starting price.

It's a dramatic giveaway. Tesla charges Chinese buyers some $8,800 for its highest-level driver assistance product.

The move seems designed to boost BYD's market share, making its cars more attractive to buyers. The move also called into question auto makers' ability to charge for driver assistance features that require additional sensors and billions of dollars to develop.

It could pressure automotive profits, but it seems like a big win for consumers -- well, for most consumers. People who just bought a BYD aren't as pleased. They could have had a better car for the same price if they had waited just a little while.

BYD didn't immediately respond to a request for comment about a response to the complaints.

It can be hard to keep everyone happy. Tesla encountered a similar dynamic when it dramatically cut prices for its vehicles in late early 2023, as rising interest rates hurt vehicle affordability. Anyone who bought a Tesla in late 2022 felt like they got a bad deal.

Any outrage didn't hurt Tesla sales. Tesla delivered about 1.8 million cars in 2023, up from 1.3 million in 2022.

The new complaints haven't hit BYD stock. Shares were up 2.9% in overseas trading. BYD's U.S.-listed ADRs were unchanged at $93.38 in premarket trading, while S&P 500 and Dow Jones Industrial Average futures were up 0.4% and 0.2%, respectively.

The backlash highlights the challenge of managing new driver assistance products for auto makers. The features are getting really good. Tesla believes its cars will drive better than humans this year. But the cars need updated sensors and computers to be able to run the best features. As driver assistance features proliferate, no one will want the older models -- unable to run the features -- unless they are at reduced prices.

To be sure, cars get better and safer over time, so the dynamic is nothing new. Still, a car that is able to do all the driving by itself is a pretty big change.

Write to Al Root at allen.root@dowjones.com

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February 18, 2025 07:39 ET (12:39 GMT)

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