Chinese automaker BYD inaugurated its artificial intelligence smart car system this week, as the world's largest electric vehicle (EV) manufacturer seeks to compete with its rivals in advanced technologies like automated parking.

BYD, which surpassed Tesla as the world's top-selling EV brand in the fourth quarter, selling more battery vehicles than its American competitor, announced plans to invest 5 billion Chinese yuan (approximately 701.8 million USD) in building the world's first professional all-terrain test driving sites in various Chinese cities.

In July last year, BYD received a conditional test license for Level 3 (L3) autonomous driving on high-speed roads in Shenzhen, making it the first automaker to obtain such a license in China, according to the company's post on Weibo.

Level 3 autonomous driving refers to conditional automated driving, where a human must be ready to take control within seconds.

Shares of the Chinese EV giant, listed on the Shenzhen Stock Exchange, fell more than 2% on Wednesday amid a broader downturn in the Chinese stock market.

The price war and intensifying competition in China's EV market have squeezed the profitability of Chinese EV manufacturers, including BYD, Nio, Xpeng, and Li Auto.

Xpeng, Nio, Huawei, and Zeekr recently unveiled new EV models as they strive to gain an edge in China's increasingly competitive EV market, which has also seen Chinese consumer electronics company Xiaomi unveil its own EV model.