SHANGHAI (Reuters) -Shares in Chinese automakers Xpeng and Geely Auto tumbled on Tuesday on worries they will struggle to compete against BYD’s move to offer free smart driving features on almost all of its models.
Xpeng’s shares fell as much as 8.4% and Geely’s dropped as much as 11.1%, both in the biggest one-day percentage decline since October 8, 2024. BYD’s Hong Kong-listed shares rose 4.5% to reach a record high before trimming gains and were last up 0.4%.
BYD on Monday put on sale 21 models equipped with its “God’s Eye” advanced driver-assistance system (ADAS) similar to that offered by rival Tesla, for no additional cost. The cheapest model the Chinese electric vehicle giant is offering is the Seagull, priced at $9,555.
BYD’s move far undercuts rivals, and analysts said it could start a new price war in an already hyper-competitive market, comparing it to how Chinese artificial intelligence startup DeepSeek recently roiled the global AI sector with its low-price offering.
The “era of smart driving popularization has come,” Nomura analysts wrote in a note.
BYD had previously only offered such features, which enable cars to navigate highway traffic autonomously under human driver supervision, in models priced from $30,000.
Tesla has these features available in China in its EVs priced from $32,000. It charges $8,000 for its Full Self-Driving (FSD) driver assistant software in the United States, or $99 a month on a subscription basis. FSD is not yet available in China.
Xpeng declined to comment, instead referring to comments its founder He Xiaopeng made online on Monday, ahead of BYD’s event.
“We welcome the official upcoming announcement by a leading automaker I respect extremely for its smart driving strategy that will bring about the popularisation of smart driving not only in China but also globally,” He said.
John Zeng, head of market forecast for China at London-based consultancy GlobalData, said Xpeng and many of its peers were under tremendous pressure. “But it would be difficult for them to follow suit with similarly affordable ones,” Zeng said.
Leapmotor, the Chinese partner of Stellantis, was the first Chinese automaker to respond, launching a new EV with smart driving technology priced under 150,000 yuan ($20,529.67) on Tuesday.
Richard Yu, chairman of Huawei’s intelligent car solutions unit, which has been pushing hard to become a top supplier of smart car technology in China, wrote on his personal Weibo account on Tuesday that “when it comes to smart driving, cobbling together usable features is completely different to it being safe and effective.”
He did not mention BYD.
China, the world’s largest auto market, has already in the past three years been in the throngs of a vicious price war that has forced foreign automakers to restructure their operations and smaller startups to retreat.
BYD has been a major driver of the trend with relentless discounting on its cars, including ones in its best-selling Dynasty and Ocean series of models, and its releases of new versions at a speed far faster than overseas brands.
Smaller rivals have been trying to keep up. On Monday, Nio’s founder William Li told a livestream that the EV maker plans to release new models every quarter starting in April.
($1 = 7.3065 Chinese yuan renminbi)
(Reporting by Brenda Goh and Zhang Yan in Shanghai; Qiaoyi Li in Beijing; Donny Kwok and Jiaxing Li in Hong Kong; Editing by Christian Schmollinger and Jamie Freed)
