From This is Not Cool (used to be Climate Denial Crock of the Week, or what I used to call Climate Crocks)
They're talking about the BYD Seagull in particular, but it applies to Chinese EVs in general. The legacy carmakers and politicians in key car manufacturing countries were contemptuous about EVs, refused to take them seriously, and refused to embrace the EV market. It was obvious that the EV market share was doubling every 18 months, had been for a decade, and that it would likely continue to double. But they ignored this. And what do they do now? They run squealing to mama and papa government for protection. They might be able to protect their home market, but they can kiss exports goodbye.
Bloomberg:
The car’s most extraordinary feature, though, is its $9,698 price tag. That undercuts the average price of an American EV by more than $50,000 (and is only a little more than a high-end Vespa scooter). Such aggressive pricing by BYD, which surpassed Tesla Inc. in late 2023 to become the world’s largest producer of electric vehicles, is indicative of how Chinese auto manufacturers will likely force US makers to pivot away from mainly producing expensive second cars for the affluent and toward more reasonably priced EVs for the Everyman.
Just as the long-feared prospect of a revolutionary EV from US tech giant Apple Inc. has receded, American carmakers now face a possibly greater challenge from Asia. China, long a manufacturing hub for Western companies’ products, is hellbent on expanding its own companies’ reach around the globe. It’s already the biggest market for EVs, and it’s using that scale and manufacturing know-how to help expand sales of competitively priced Chinese models to an increasingly climate-conscious world.
For now, the Chinese onslaught is being kept at bay in America by stiff tariffs and moves to erect even tougher trade barriers against the US’s geopolitical adversary. But the Chinese market accounts for about 70% of all EVs sold globally, so China’s push to lower prices is causing a ripple effect that can’t be ignored in the long term—even if political maneuvering by American lawmakers manages to slow the Asian giant’s automotive advance toward the US, the world’s most profitable car market.
“This threat has put everybody on alert,” says Jeff Schuster, global vice president for automotive research for consultant GlobalData. “It forces innovation in a way that might not have happened as quickly.”
Auto executives and politicians in Washington are sounding the alarm about a potential existential threat to American car brands—and the millions of workers employed building them. The Alliance for American Manufacturing, a trade group backed by major manufacturers and labor unions, is calling for new protectionist trade measures against China to prevent an “extinction-level event.”
“Chinese companies are ultra-competitive today,” says Michael Dunne, an auto industry consultant who previously worked for General Motors Co. in Asia. “The question in every boardroom right now is, how do we compete with them?”
Ford Motor Co., Tesla and other carmakers are quickly tearing up their EV playbooks to compete against these cheap new vehicles sold outside the US. Ford Chief Executive Officer Jim Farley calls the Seagull “pretty damn good” and cautions that any automaker that can’t compete with the Chinese globally in the near future risks losing as much as 30% of its revenue. One of Farley’s top EV executives called Chinese EVs “a colossal strategic threat.”
South China Morning Post:
BYD, the world’s largest electric vehicle (EV) maker, has priced another model under the 100,000 yuan (US$13,912) threshold as a discount war in China’s EV market intensifies.
The Shenzhen-based company, backed by Warren Buffett’s Berkshire Hathaway, announced on Wednesday that the updated fully electric e2 model will start at 89,800 yuan, 12.6 per cent less than the previous price of 102,800 yuan.
The compact sport-utility vehicle, with a range of 405 kilometres, becomes the fifth BYD model available for less than the psychologically important threshold price – viewed as affordable even for low-income wage earners in the mainland China market.
“BYD appears to be extremely aggressive in driving a transition from petrol cars to EVs in the country’s automotive industry,” said Eric Han, a senior manager at Suolei, an advisory firm in Shanghai. “The cheap models will also draw middle-income consumers who have become price sensitive amid a bearish economic outlook.”
The lethargic legacy carmakers can sleep slightly better knowing that the cheap EVs in China are not so cheap when they're sold outside China. In Australia, the Seagull will prolly be sold for around $31 K, which removing sales tax and allowing for the US/A$ exchange rate, is roughly US$18K.
Remember, CATL (the world's largest lithium-ion battery maker) has halved the cost of batteries this year, to just $56/kWh. Battery costs will continue to fall. The fierce competition in EVs in China will not go away, and since Chinese carmakers have much higher margins on exports, expect them to export as much as they can. The US and Europe might be able to protect their domestic car markets, but the rest of the world will, if they have no domestic carmakers, embrace cheap EVs, or, if they do have a domestic car industry, will persuade BYD and others to set up car plants in their countries.
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