For everyone, BYD is providing a self-driving feature. That might cause problems for Tesla.

China’s BYD Co. declared that its “God’s Eye” self-driving technology will be included into the majority of its cars, including some of the less expensive models, at no extra cost, posing a possible threat to electric vehicle manufacturers like Tesla Inc.

At a gathering in Shenzhen on Monday, Wang Chuanfu, the chairman of BYD (HK:1211), made the announcement. “2025 will be the first year of intelligent driving for all,” he declared, predicting that within three years, the self-driving function will be as commonplace as seat belts, according to media sources.

In international trade, BYD shares reached their highest intraday level ever before reversing course and ended 0.7% lower. In Asian trading, the stock of rival XPeng Inc. (XPEV) fell 6.8%, while shares of NIO Inc. (NIO) listed in the United States fell 6.7%. Tuesday saw a 6.3% drop in Tesla shares (TSLA), marking the sixth consecutive decline.

In response to BYD’s “smart driving for all” approach, a group of Jefferies analysts led by Johnson Wan stated, “BYD has made a 180-degree U-turn in AD [autonomous driving], with BYD’s chairman Mr. Wang redefining its company strategy on intelligent driving over the next few years.”

Analysts at UBS were likewise awed. “This has the potential to be revolutionary, especially in the low-cost market. By providing a cutting-edge L2+ ADAS system without boosting prices, BYD may be able to gain a competitive advantage over more established rivals and put more pressure on their product prices. “We believe that BYD’s move could have the biggest negative impact on Volkswagen, second only to Tesla,” a team headed by Patrick Hummel wrote in a note to clients.

Analysts pointed out that BYD will now provide self-driving technology on 21 models, including some that cost less than $10,000, whereas previously it was only available on cars that cost $30,000 or more. All of Tesla’s vehicles have the option to include full self-driving technology, albeit the cost has decreased in recent years.

According to UBS analysts, BYD’s most recent declaration will only cause international OEMs’ market share losses in China to grow. “Last year, the share of domestic OEMs increased from 59% to 66%, and we expect it to surpass the 70% mark this year,” Hummel and his colleagues stated.

Tesla has been having trouble in international markets; in January, sales in China fell 11% while those of market leader BYD increased 48%.

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Tesla is the worst-performing of the Magnificent Seven, a group of mega-technology businesses, with shares down 13% so far this year. Nevertheless, the stock has increased 81% in the last 12 months.

Other domestic problems facing Tesla include investors’ growing skepticism about U.S. EV subsidies under President Trump’s administration. On Monday, a Stifel analyst lowered his price target, citing concerns that some customers would get disenchanted with Tesla vehicles due to CEO Elon Musk’s political involvement.

Oppenheimer reduced his 2025 and 2026 Tesla delivery projections by 20,000 and 28,000 vehicles, respectively, on Tuesday. Additionally, it reduced the projected revenue for 2025 from $101.1 billion to $99.8 billion and the adjusted profits per share from $1.63 to $1.58.

Along with Musk’s attempt to take over Open AI with a group of investors, a group of analysts headed by Colin Rusch also pointed to the possibility that Musk’s political activities could alienate some customers. They pointed out lackluster sales patterns for Tesla in California and around the world, calling that a “distraction from Tesla’s challenges.”

We don’t anticipate that any significant conversations [on Open AI] will emerge. But as EV and AV competition heats up, we see growing risks to Street projections for [Tesla],” Rusch and his team stated.