SHANGHAI, February 11 (Reuters) – Shares in Chinese automakers Xpeng (9868.HK) and Geely Auto (0175.HK) experienced significant drops on Tuesday, fueled by concerns regarding their ability to compete with BYD’s recent move to offer free smart driving features on a wide range of its models.
Xpeng’s shares saw a sharp decline, falling as much as 9.2%, while Geely’s shares plunged by up to 11.4%. These represent the largest single-day percentage drops for both companies since October 8, 2024. In contrast, BYD’s shares listed in Hong Kong rose by 4.5% to hit a record high before closing 0.7% lower.
BYD announced on Monday the release of 21 models equipped with its “God’s Eye” advanced driver-assistance system (ADAS). This system, similar to the one offered by Tesla (TSLA.O), will be available at no additional cost to buyers. The most affordable model, the Seagull, is priced at $9,555.
This move by BYD undercuts its rivals significantly, leading analysts to predict a potential price war in an already highly competitive market. Some analysts drew parallels to the recent disruption in the global AI sector caused by the low-price offerings of Chinese artificial intelligence startup DeepSeek.
“The era of smart driving popularization has come,” wrote Nomura analysts in a note.
BYD is implementing three different versions of the “God’s Eye” ADAS across most of its vehicle lineup. All three versions offer automated parking and lane-keeping features, aligning with conventional level 2 technologies. The basic version, available from the Seagull to models priced up to 219,800 yuan ($30,078.69), will enable autonomous driving on highways, though drivers will still need to keep their hands on the wheel and take control when necessary. The two higher-end versions, which will be installed on higher-end models like BYD-branded cars, Denza, and Yangwang brands, will enable the car to drive autonomously, though under human supervision, in more complex urban traffic.
Previously, BYD only offered such features in models priced from $30,000. Tesla offers similar features in its EVs in China starting from $32,000. In the United States, Tesla charges $8,000 for its Full Self-Driving (FSD) driver assistant software or $99 per month via subscription. FSD is not yet available in China.
XPeng declined to comment on the matter, instead pointing to comments made online Monday by its founder, He Xiaopeng, prior to BYD’s announcement. He stated, “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.”
John Zeng, the head of market forecast for China at London-based consultancy GlobalData, stated that Xpeng and many of its competitors are facing immense pressure. “But it would be difficult for them to follow suit with similarly affordable ones,” Zeng said.
Leapmotor (9863.HK), the Chinese partner of Stellantis (STLAM.MI), quickly responded. On Tuesday, the company launched a new EV with smart driving technology priced under 150,000 yuan ($20,529.67).
Richard Yu, chairman of Huawei’s intelligent car solutions unit, a company actively seeking to become a leading supplier of smart car technology in China, wrote on his personal Weibo account on Tuesday, “When it comes to smart driving, cobbling together usable features is completely different to it being safe and effective.” He did not mention BYD directly.
China, the largest automotive market globally, has been in the midst of a fierce price war since 2023. This has forced foreign automakers to restructure their operations, and smaller startups to withdraw from the market.
BYD has been a key player in this trend, consistently offering discounts on its cars, including its best-selling Dynasty and Ocean series of models, and releasing new versions at a much faster pace than overseas manufacturers. Smaller rivals are struggling to keep pace. On Monday, Nio’s founder, William Li, announced during a livestream that the EV maker plans to release new models every quarter starting in April.
($1 = 7.3065 Chinese yuan renminbi)
