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A significant challenge comes from growing competition, particularly from BYD, which has announced its new advanced driver-assistance system called “God's Eye.” This new system will be rolled out across multiple vehicle models at no additional charge. Unlike Tesla's reliance on lidar technology, BYD's entry-level solution utilizes cameras and ultrasonic sensors, potentially making it a more cost-effective option for consumers.
Despite Tesla's historical advantage with its Full Self-Driving (FSD) software, delays in its rollout in China could diminish this edge. The Chinese government’s substantial subsidies for the EV sector could further motivate local companies to drive down costs for autonomous technology, posing a challenge for Tesla if they cannot adapt quickly.