BYD Shares Rise as Tesla’s Budget EVs Fail to Impress Investors

Shares of BYD Co (HK:1211) climbed more than 2% to HK$110.6 in Hong Kong trading on Wednesday, following a lukewarm response to Tesla’s (NASDAQ:TSLA) new “affordable” electric vehicles.

Tesla unveiled lower-cost versions of its Model Y and Model 3 on Tuesday, priced at $39,990 and $36,990 respectively. Despite boasting over 300 miles of driving range, the models omit certain premium features such as Autosteer and other high-end components. The move was widely seen as an attempt to appeal to budget-conscious buyers amid intensifying global EV competition.

However, investors were not impressed. Tesla’s stock slipped 4.5% following the announcement, as analysts questioned whether the modest price cuts would be enough to reignite demand—especially after the expiration of U.S. EV tax credits. Many analysts described the update as incremental rather than revolutionary, suggesting it may not significantly expand Tesla’s customer base.

In contrast, BYD continues to dominate the affordable EV market with its aggressive pricing and rapid global expansion. The Chinese automaker has gained strong traction with models like the BYD Seagull, starting at just $11,400, undercutting Tesla’s entry-level options by a wide margin. This price advantage, combined with BYD’s growing presence in key international markets, has strengthened its competitive edge against Western rivals.

The market reaction underscores a shifting dynamic in the EV industry: while Tesla focuses on maintaining brand value and technology leadership, BYD’s strategy of affordability and scale is resonating strongly with consumers—particularly in emerging markets.

As Tesla faces increasing pressure from global competitors, BYD’s upward momentum highlights China’s rising influence in the electric vehicle landscape and the growing consumer demand for cost-effective EV solutions.