Shares in Chinese automakers Xpeng and Geely Auto tumbled on Tuesday on worries they will struggle to compete against BYD's move to offer smart driving features across almost all of its line-up for free.

Xpeng's shares fell 5.9%, their biggest decline in two months, while Geely fell 7.2%. BYD's Hong Kong-listed shares added 0.9% to reach a record high.

BYD on Monday put on sale 21 models equipped with its "God's Eye" advanced driver-assistance system (ADAS) similar to the likes offered by Tesla for no additional cost. The cheapest model it is offering is the Seagull, priced at USD 9,555.

The Chinese electric vehicle giant's move far undercuts rivals and analysts say it could start a new price war in an already hyper competitive market, comparing it to how Chinese artificial intelligence startup's DeepSeek recently roiled the global AI sector with its low-price AI offering.

BYD had previously only offered such features, which enable cars to navigate highway traffic autonomously under human driver supervision, in models priced from USD 30,000.

Tesla has these features available in China in its EVs priced from USD 32,000. It charges USD 8,000 for its Full Self-Driving (FSD) driver assistant software in the United States or for USD 99 a month. FSD is not yet available in China.

Xpeng declined to comment and referred 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 popularization of smart driving not only in China but also globally," He said.

The "era of smart driving popularization has come," Nomura analysts wrote in a note.

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 electric vehicle with smart driving technology priced under 150,000 yuan 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.