A yawning gap has opened up among China's electric-vehicle stocks with BYD beating all comers due to its latest technological rollout.

The carmaker's shares have defied heavy losses in EV stocks around the world to gain more than 6% in Hong Kong this year thanks to the introduction of the fifth generation of its plug-in hybrid drive system in May. Those of its smaller competitors Li Auto Inc., Xpeng Inc. and Nio Inc. have all tumbled at least 45% amid concern over slowing EV demand and a persistent price war.

The gulf is set to keep growing, market watchers say.

BYD's latest plug-in hybrid platform allows vehicles to travel non-stop for more than 2,000km -- the distance between Singapore and Bangkok -- without recharging or refueling, and was introduced in two models that sell for under 100,000 yuan ($13,750). Plug-in hybrids occupy the middle ground between traditional gas-powered vehicles and full EVs, and are being touted as a potential area for future growth as sales of pure EVs become saturated.

"We are particularly optimistic about BYD's plug-in hybrid electric vehicle potential and overseas expansion opportunity, especially given the slowing global EV transition," said Bing Yuan, a fund manager at Edmond de Rothschild Asset Management in Paris. "It might expand its market share lead and achieve faster growth for PHEVs compared...