American EV maker Tesla (TSLA) is losing its edge to the Chinese powerhouse BYD (BYDDF) as the competition for AI (artificial intelligence)-powered driving technology intensifies. Yesterday, BYD unveiled a new AI-powered driving system tailored for affordable, mass-market vehicles, further strengthening its lead over Tesla. Meanwhile, Tesla has been awaiting final approval in China for its version of AI-powered driving, known as full self-driving (FSD), for the last 10 months. Following the news, BYDDF stock surged by over 3% on Monday, while TSLA stock saw a 3% decline.
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Tesla Waits While BYD Launches Free Smart Driving Tech
BYD had intensified the EV price war in China as it rolled out its latest “God’s Eye” intelligent driving system. It includes advanced features typically found only in high-end EVs (electric vehicles), such as remote parking via smartphones and autonomous overtaking on roads. BYD’s progress further highlights Tesla’s delay in launching its latest driver-assistance software in China, which CEO Elon Musk attributed to regulatory challenges in January.
Meanwhile, BYD launched 21 models featuring its advanced driver-assistance system, similar to Tesla’s offerings, at no extra charge. The most affordable model, the Seagull, is priced at $9,555. On the other hand, Tesla offers similar features in its Chinese EVs starting at $32,000. In the U.S., Tesla charges $8,000 for its FSD software, or $99 per month, which is not yet available in China.
The decision to make advanced driving features available in affordable vehicles could give BYD a significant edge over Tesla and other local competitors, who have struggled to offer such cutting-edge technology in their more budget-friendly models.
Tesla Stock Dips to Its Lowest Point of 2025
Year-to-date, TSLA stock has fallen more than 13%, fueled by concerns over disappointing European sales and Musk’s controversial political involvement. However, this decline comes after a strong 70% rally in 2024.
In contrast, BYD (HK:1211) shares in Hong Kong have surged nearly 30% in 2025, reaching a record high. This includes a 21% rally last week, fueled by strong anticipation ahead of Monday’s event.
Meanwhile, other Chinese EV makers also took a hit, with Xpeng (HK:9868) (XPEV) dropping over 7% and Geely (HK:0175) (GELYF) declining by 10% in Hong Kong on Monday. Investors are worried these companies will face challenges competing with BYD, which is offering smart driving features across nearly its entire lineup for free.
Is Tesla a Good Stock to Buy?
On Wall Street, analysts have maintained a neutral stance on Tesla stock. According to TipRanks, TSLA stock has received a Hold consensus rating, with 12 Buy, 12 Hold, and 10 Sell recommendations. The average price target for Tesla shares is $335.86, suggesting a potential downside of 4.24% from the current level.
