Chinese EV Maker BYD to Use DeepSeek Tech, Report Says; Investors Eye Tesla

Chinese EV company BYD is planning to integrate Chinese AI startup DeepSeek’s technology into almost all its vehicles as it competes with Tesla (TSLA) in the mobility market.

According to CNBC, BYD has said that the startup’s AI advanced smart driving will be in at least 21 of its new model vehicles with features including automatic parking and navigating on highways. BYD and Tesla didn’t immediately return requests for comment.

Nomura analysts, in a note Wednesday, said that the plan would “usher in a new era of enabling smart driving system for most of its [BYD’s] mass market models.”

DeepSeek‘s latest R1 AI model, trained at a fraction of the cost of U.S. rivals like ChatGPT, has challenged the view that developing AI requires the billions of dollars Big Tech firms have been spending.

Tesla’s Full Self-Driving (FSD) system has yet to receive Chinese approval, and the EV firm hasn’t launched its robotaxi. In its January earnings call, of which a transcript was made available by AlphaSense, Musk said the company faces challenges in rolling out FSD in the “gigantic market” of China due to regulations from both Beijing and the U.S.

Tesla shares have been struggling since hitting a record high in December on the back of the close ties between U.S. President Donald Trump and Musk. Trump’s tariffs on Canada and Mexico, which have been paused for a month, won’t directly affect Tesla since its vehicles sold in the U.S. are assembled domestically, but they do contain parts made across the northern and southern borders.

Tesla shares were rising about 1% premarket, reversing earlier losses. They have fallen 18% so far in 2025 through Tuesday but are up almost 70% in the past 12 months.

This article has been updated since it was first published with new share price and other information.