Chinese EV giant BYD says it has a backup plan if it's cut off from Nvidia chips

In a recent statement, BYD, a prominent Chinese electric vehicle manufacturer, addressed its strategy for potential disruptions in the supply of Nvidia chips, which are crucial for its vehicles. Stella Li, the company's executive vice president, confirmed during an interview with CNBC that while there has been no official directive from the Chinese government to halt the use of Nvidia chips, BYD is prepared with an alternative strategy. "Every company has a contingency plan, and BYD is no exception," Li stated. Although she refrained from disclosing specific details about the backup plan, she highlighted the lessons learned during the COVID-19 pandemic, a period marked by severe semiconductor shortages that impacted the automotive industry. Li noted that BYD faced no significant challenges during that time due to its extensive in-house technology development, which allowed the company to quickly identify alternative solutions. BYD has made a concerted effort to maintain control over its supply chain, encompassing everything from vehicle manufacturing to battery production. Li emphasized, “We have robust technology capabilities internally, ensuring that we are always prepared.” The backdrop of these developments involves Nvidia, a key player in the AI chip market, which has faced scrutiny amid escalating U.S.-China tensions. Recently, the company's H20 AI chip, tailored to meet U.S. export regulations, experienced a series of restrictions before being allowed for sale in China due to a revenue-sharing agreement with the U.S. government. Reports also suggest that China is discouraging local firms from purchasing Nvidia's AI chips. However, Nvidia also produces specialized semiconductors for the automotive sector, such as the Nvidia Drive AGX Orin, which supports autonomous driving capabilities. BYD has integrated this technology into its vehicles without any current indications that the Chinese government will impose a ban on these auto-related chips. Li expressed confidence, stating that it is improbable for any country to restrict Nvidia's automotive chips, as such actions could jeopardize the company's standing as one of the most valuable firms globally. “Losing access to the Chinese market would be detrimental for Nvidia, and I believe no one desires that outcome,” she remarked.