China’s electric vehicle (EV) sector is entering a new phase of global competitiveness, as domestic automakers such as BYD Co. Ltd. accelerate their push into autonomous driving. Once narrowly trailing U.S. rivals in innovation, these companies are now redefining the battlefield by combining affordability with advanced technology. BYD’s recent decision to offer its “God’s Eye” driver-assistance system free of charge in China marks a pivotal moment in this shift—directly challenging Tesla’s $TSLA premium pricing strategy and setting the stage for a broader reconfiguration of the autonomous vehicle market.

Recent movements in the stock market have highlighted significant volatility among major Chinese automotive manufacturers. Shares of Xpeng $9868.HK and Geely Auto $0175.HK saw sharp declines on Tuesday amid growing concerns that they might struggle to compete with BYD, which now offers intelligent driving features in nearly all its models free of charge. Meanwhile, BYD's shares have climbed by 0.9%, reaching a record high and reinforcing their market leadership.