Xpeng's stock experienced a significant 7.6% drop on Tuesday, following an announcement by Chinese EV giant BYD that it will offer advanced autonomous driving features on most of its models, including those priced as low as $9,555. This move by BYD is set to intensify competition and potentially start a new price war in the market for autonomous driving technology.

BYD's aggressive pricing strategy for its smart driving solutions is seen as a major threat to rivals like Xpeng. BYD's Hong Kong-listed shares surged to an all-time high, rising 4.5% on Tuesday, while Xpeng's shares plunged 6.5% in Hong Kong trading amid concerns over intensifying competition and potential pressure on profit margins.

Analysts have hailed BYD's move as the arrival of the "era of smart driving popularization," with Nomura, which has a "Buy" rating on BYD, predicting that this could spark a new price war in the industry. BYD's supply chain partners, such as BYD Electronic, Will Semiconductor, and Sunny Optical, also witnessed share price gains in response to BYD's autonomous driving push.