China's driverless car revolution

What happened: BYD, a Chinese automaker, launched its first 4-nanometer chip designed for self-driving cars, aiming to strengthen its position in the competitive electric vehicle (EV) market. Meanwhile, at the Beijing Auto Show, China's car companies showcased their driverless car ambitions, with few vehicles on display requiring a driver. However, Chinese autonomous trucking companies caution that AI breakthroughs alone won't accelerate the rollout of self-driving vehicles.

Market impact: This narrative drives the EV and self-driving car sectors in China. BYD's chip launch could boost its competitive edge in the domestic EV market, potentially pressuring rivals like NIO and Xpeng. The focus on autonomous vehicles also impacts tech companies involved in AI and chip manufacturing, such as Nvidia and AMD, as well as suppliers like Bosch and Continental.

What to watch next: BYD's earnings report on April 30 will provide insights into the demand and market share of its EVs and new chips. Additionally, the Chinese government's upcoming policies on autonomous driving regulations and subsidies, expected by Q2 2023, will significantly influence the trajectory of this narrative.