The Bao 8 is expected to feature Huawei's Qiankun ADS 3.0, which will be the first collaboration between BYD and Huawei in the smart driving space.

BYD (HKG: 1211, OTCMKTS: BYDDY) is reportedly going to use Huawei's intelligent driving system on its sub-brand Fang Cheng Bao's upcoming new model, the Bao 8, in what will be the first collaboration between the two in the smart driving space.

Fang Cheng Bao is pushing ahead with the use of Huawei's smart driving system on the Bao 8, which will be the BYD sub-brand's first model with city NOA (Navigate on Autopilot) capabilities, according to a report by local media outlet LatePost yesterday.

BYD officially unveiled the Fang Cheng Bao brand on August 16, 2023, and the brand's first model, the Bao 5 off-road SUV (sport utility vehicle), was launched on November 9, 2023, with deliveries beginning at the end of the same month.

As of now, Fang Cheng Bao has only one model, the Bao 5, on sale. At its spring event on April 16, the brand unveiled the Bao 8, as well as two concept cars, the Super 3 SUV and Super 9 supercar, whose launch dates are yet to be determined.

The official launch date for the Bao 8 has been changed from the previously planned third quarter of this year to the fourth quarter, the LatePost report said.

The model aims to target the market with a price tag of around RMB 500,000 ($69,680), with its main competitor being Great Wall Motor's Tank 700 Hi4-T.

The Bao 8 will deliver on the smart driving experience, Fang Cheng Bao general manager Xiong Tianbo said last month.

Huawei's advanced smart driving solution could be one of the Bao 8's surprises, LatePost said, adding that road test information showed the Bao 8 is equipped with a LiDAR that the Bao 5 doesn't have -- one of the hardware foundations of Huawei's Qiankun ADS 3.0.

Huawei released Qiankun ADS 3.0 in April, which enables advanced smart driving features including city NOA, and was first used in the Stelato S9 sedan built by Huawei in partnership with Beijing Automotive Group (BAIC Group).

From September, the Luxeed S7 sedan, jointly built by Huawei and Chery, and the Aito series of SUV models -- Aito M5, Aito M7, and Aito M9 -- jointly built by Huawei and Seres Group, will also be see the smart driving system upgraded to ADS 3.0, the report noted.

By 2025, Dongfeng Motor's new energy vehicle (NEV) brand Voyah, and GAC Group's Trumpchi brand will also have models with Huawei's Qiankun ADS 3.0 on board, the report added.

For BYD, this will be the first time it has partnered with Huawei in the smart driving space, after its smart driving solution suppliers were dominated by growth-stage startups, including Momenta, Horizon Robotics, Black Sesame Technologies, DJI, and Hongjing Drive.

When BYD works with smart driving suppliers, it divides the solutions into different orders and gives them to different suppliers, and the smart driving solutions for different variants of the same model could also be provided by different suppliers, the LatePost report said.

This practice helps BYD control costs and also avoids dependence on a few suppliers, the report said.

BYD's long-term goal is to develop its own smart driving solutions, and currently has more than 4,000 R&D staff in the field, more than Li Auto (NASDAQ: LI), Nio (NYSE: NIO), and Xpeng (NYSE: XPEV).

Since 2022, BYD has repeatedly restructured its smart driving business and brought in external talent with the aim of consolidating resources and accelerating its in-house development progress, the report noted.

The Bao 8 will be Fang Cheng Bao's flagship model and needs to establish a premium image for the brand, and using Huawei's smart driving solution is one of the ways to do that, the LatePost report noted.

As Fang Cheng Bao's first model, the Bao 5 saw monthly deliveries of more than 5,000 units in both December last year and January this year. But deliveries have been sluggish since February, with monthly deliveries below 3,000 units for the past three months.

Fang Cheng Bao announced new pricing for the Bao 5 on July 29, with prices for all four variants reduced by RMB 50,000, bringing the starting price down to RMB 239,800.

($1 = RMB 7.1762)

BYD Fang Cheng Bao to launch new models more intensively from Q4