Tesla Self-Drives Itself Into a Ditch

Well,Tesla got the $$ kicked out of it today. Again. It’s now a bit over 32% off the highs without much signs of stopping. Maybe. So why? Well, enter the competition. BYD has managed to produce an affordable autonomous car. Tesla has not. It’s as simple as that. BYD announced today that they will be including their autonomous driving system into their entire lineup of cars, including a model that’s under $10k. Tesla isn’t even close.

Let’s break down the fight down, round by round.

Round 1: The Technology – Who’s Got the Smarter Brain?

Tesla: The Visionary (Literally)

Tesla’s approach to self-driving technology is extremely ambitious. The company’s Full Self-Driving (FSD) software relies entirely on cameras and neural networks, with Tesla boldly ditching radar and LiDAR in favor of a vision-only system.

Musk argues that humans drive using their eyes, so why shouldn’t AI? Fair enough, but humans also have something Tesla’s software doesn’t: common sense (Well, maybe. Once. A guy can dream.) While FSD has shown remarkable progress, it’s still stuck in a sort of teenage phase—capable of great things but prone to overconfidence and the occasional awkward mistake, like stopping randomly at green lights or deciding that a parked truck is a tunnel. Ya know, minor details.

Tesla’s advantage? Data. With millions of vehicles on the road, Tesla collects an enormous amount of real-world driving data, which feeds into its AI to improve decision-making. Theoretically, this gives Tesla an edge in training its neural networks. But it’s learning from people, and if I know anything about anything, it’s that people as a whole are not good drivers. So there’s that issue.

BYD: The Pragmatic Engineer

Meanwhile, BYD takes a more measured approach. Instead of Musk’s “Cameras are all we need!” mantra, BYD embraces a hybrid system that incorporates LiDAR, radar, and cameras—essentially hedging its bets between different sensor technologies. This approach, used by other self-driving leaders like Waymo, provides a more redundant and fail-safe method for autonomy. Note “more” there. Not fail-safe, just more fail-safe.

BYD’s DiPilot and DiSus (short for “Driving Intelligence” and “Suspension Intelligence”) systems have been improving steadily, but they don’t quite have the brand cachet of Tesla’s FSD. They’re focused more on advanced driver assistance systems (ADAS) rather than pushing full autonomy like Tesla. However, BYD’s tech is proving to be more reliable in complex urban environments, particularly in China, where chaotic traffic conditions demand smarter decision-making.

Winner: Tesla (for ambition), BYD (for realism).
Tesla’s self-driving dreams are grand, but BYD’s incremental, cautious approach may lead to fewer lawsuits.

Round 2: Who’s Actually Delivering Results?

Tesla: Flashy But Disappointing

Tesla’s FSD is impressive—when it works. The problem is, it doesn’t always work. Despite a handful of jaw-dropping demos, real-world performance still leaves something to be desired. It’s currently Level 2 autonomy, meaning the driver has to be ready to take over at all times (so, not quite the sci-fi dream just yet).

Add that to the legal trouble Tesla is facing regarding its FSD claims. Multiple investigations are underway into whether Tesla exaggerated its self-driving capabilities, leading to crashes and consumer confusion. Musk might tweet about “solving autonomy this year,” but the market is still waiting for that breakthrough moment. Showroom cool, but not so great in real life. Like my last date.

BYD: Steady As She Goes

BYD, on the other hand, isn’t overpromising. Its assisted driving features—while not as ambitious—tend to work more consistently. The company is focusing on Level 2+ autonomy, meaning advanced driver assistance rather than full autonomy. While that might not sound as exciting, it’s proving to be safer and more practical in the short term.

Plus, BYD’s vehicles are cheap and reliable, which means more consumers are actually using them. While Tesla chases perfection, BYD is busy deploying technology that works now rather than in some future update.

Winner: BYD (for delivering reliability), Tesla (for pushing boundaries).

Round 3: Market Impact and Business Strategy

Tesla: Hell on SaaS

Tesla’s ultimate goal isn’t just making cars—it’s turning FSD into a software subscription business. With $12,000 FSD packages and monthly subscription options, Tesla is banking on a future where people pay for autonomy like they pay for Netflix. If Tesla can crack the self-driving puzzle first, it won’t just be selling cars; it’ll be selling licenses to the future of transportation. I know I love paying monthly to be able to use my car, don’t you?

BYD: Flood the Market and Win with Scale

BYD is taking a completely different approach. Instead of betting big on FSD revenue, it’s simply trying to sell as many EVs as possible. And it’s working. In 2023, BYD actually outsold Tesla in total EV units—something no other company has been able to do.

BYD’s strategy is volume over margins. It’s producing affordable EVs at an incredible pace, making it the biggest EV manufacturer in the world. And with that market dominance, BYD can gradually improve its autonomous tech without relying on it as a primary revenue stream.

Winner: BYD (for business dominance), Tesla (for software potential).

Round 4: The Future – Who’s More Likely to Win?

The battle between Tesla and BYD isn’t just about autonomy—it’s about who shapes the future of transportation. So, who’s in the best position?

• Tesla’s Strengths:
  • First-mover advantage in autonomy.
  • Massive global data collection.
  • Strong brand and cult-like following (but shifting).
  • Potential to turn FSD into a high-margin software business.
• Tesla’s Weaknesses:
  • FSD isn’t fully autonomous yet and faces regulatory scrutiny.
  • Expensive vehicles limit mass adoption.
  • Heavy reliance on Musk’s leadership, which can be… unpredictable?
• BYD’s Strengths:
  • Dominating EV sales with affordable, high-quality cars.
  • Government backing in China, giving it a home-field advantage.
  • More cautious, stable approach to autonomous driving.
  • Supply chain control—BYD makes its own batteries and chips, which Tesla doesn’t.
• BYD’s Weaknesses:
  • Not as well-known outside China (yet).
  • Lags behind Tesla in AI-driven self-driving software.
  • Less brand loyalty compared to Tesla’s devoted fanbase.

Final Verdict:
Tesla is still leading in pure autonomous driving technology, but BYD is winning the EV war through affordability and scale. If Tesla can solve FSD before anyone else, it could revolutionize the industry. But if it takes too long, BYD’s sheer volume and steady progress might leave Tesla’s high-tech dreams in the dust.

In this trader’s opinion, making my car a SaaS is so infuriating that I will forever and always refuse to buy one purely out of principle.

Final Thoughts: What Should We Expect in the Next Five Years?

• Tesla’s FSD will likely reach Level 3 autonomy, meaning cars can drive themselves in some conditions.
• BYD will keep expanding globally, challenging Tesla in Europe and North America.
• Regulations will play a huge role—whichever company adapts best will have the edge.
• Autonomous driving will remain in a legal gray area, slowing full adoption.

On the trading side, my personal signals are firing to take a long position on TSLA. If I were going to trade it, I’d look at a simple Call Vertical Spread, 325/330 strikes for March expiration. It’s trading just under $2.50 and is essentially a 1:1 risk/reward on TSLA landing above 330 by expiration. If TSLA stalls out, the trade doesn’t lose money, but if it rallies even a bit, you’ll win