Chinese electric vehicle giant BYD is quietly preparing for the worst-case scenario in the escalating US-China chip war. Executive VP Stella Li revealed Tuesday that the company has backup plans ready if Beijing forces it to abandon Nvidia's automotive chips, though she stressed no directive has been issued yet. The admission highlights how even automotive semiconductors are now caught in the geopolitical crossfire.
BYD just put the chip war's latest tension on full display. The Chinese EV powerhouse confirmed Tuesday it's got contingency plans locked and loaded if Beijing decides to cut it off from Nvidia's automotive semiconductors - even though no such order exists yet.
"Everybody has a backup. BYD has [a] backup," Executive VP Stella Li told CNBC's Dan Murphy during an interview that revealed just how far companies are thinking ahead in this trade standoff. Li wouldn't detail the backup plan, but her confidence suggests BYD's been war-gaming this scenario for months.
The backdrop makes this revelation particularly striking. While Nvidia's AI chips have been ping-ponging between banned and permitted status in China all year, its automotive semiconductors have largely stayed out of the regulatory crosshairs. BYD currently uses Nvidia's Drive AGX Orin system to power autonomous driving features across its vehicle lineup.
But Li's comments show how the uncertainty is forcing even indirect players to prepare for escalation. She pointed to BYD's performance during the COVID semiconductor crisis as proof the company can pivot quickly. "BYD had 'no issue' at the time because it developed a lot of its technology in-house," Li explained, highlighting the vertical integration strategy that's become BYD's competitive moat.
That in-house capability isn't accidental. BYD has methodically built control over massive chunks of its supply chain, from battery chemistry to semiconductor design. It's a strategy that looked like over-engineering until geopolitical tensions made supply chain resilience a survival skill.
The automotive angle adds complexity to an already tangled situation. While China has reportedly been discouraging local tech firms from buying Nvidia's AI chips, car semiconductors operate under different rules and relationships. Nvidia's automotive business represents a separate product line with distinct customers and use cases.