“Build your dream” – this is the slogan under which the Chinese electric car company BYD sells its vehicles. The company itself currently dreams mainly of conquering the European market.
Although BYD is already the largest manufacturer of electric cars in the world, the brand is still relatively unknown in Europe. That should change now. This week we were introduced to the “BYD Explorer No. 1» The electric carmaker’s first freighter arrives in Bremerhaven, Germany. On board: approximately 3,000 vehicles. The freighter represents the start of its own fleet, a total of eight ships are currently planned.
For German companies, the Chinese dreams could be a rude awakening. In Switzerland, the Emil Frey Group wants to import electric cars from China from the summer of 2024.
Many models at competitive prices
Because BYD is creating something that will find many customers in Asia – and if the group has its way, soon also in Europe. The manufacturer brings a new car model to the market almost every quarter.
In the fall, BYD introduced the Seal sedan, a competitor to the Tesla Model 3 or the VW ID.7. Now the Seal U is an SUV model intended to compete with Tesla’s Model Y or VW’s ID.4.
The company is involved in an ongoing price war, especially with its American competitor Tesla. Following the short-term end of e-car financing in Germany at the end of 2023, BYD reacted quickly and reduced the price of the sedan from 44,990 to 41,990 euros.
Another important selling point for the Chinese: the so-called Blade batteries. They must weigh less than conventional cells, be flatter and safer and also contribute more to the stiffness of the car. In the sedan, the battery has a capacity of about 83 kWh and should last up to 570 standard kilometers. BYD offers 72 or 87 kWh for the SUV and promises 420 or 500 kilometers.
From battery manufacturer to largest electric car manufacturer
Although BYD started as a battery company in 1995 and also supplies Western companies such as BMW, Mercedes, Audi, Tesla, Toyota and Ford, the company started building its own cars in 2003. BYD said goodbye to the combustion engine in 2022, but plug-in hybrids are still in the program. This now benefits the company as demand for electric cars decreases. BYD plans to soon offer its Seal U SUV in Europe as a plug-in hybrid, just as it does at home in China.
BYD overtakes VW and Tesla
With its aggressive pricing policy and the rapid market introduction of numerous models, BYD managed to overtake the former market leader in China, the German manufacturer Volkswagen, last year. In the fourth quarter, the Chinese also overtook American electric car pioneer Tesla as the former global market leader for electric cars.
However, the manufacturer’s dreams go much further: recently, Chinese electric cars in Europe only accounted for just under eight percent. BYD already had the largest stand at the German IAA.
BYD is building a car factory in Europe
BYD replaces Volkswagen as official sponsor of the German national team at the European Football Championship. As a next step, the manufacturer wants to open a hundred car dealers in Germany and its own factory in Hungary. BYD wants to sell 120,000 electric cars in Germany by 2026. Automobile expert Ferdinand Dudenhöffer made his decision in an analysis in January: “BYD will replace Toyota in about 10 years.” Toyota is currently the largest car manufacturer in the world, ahead of VW.
Demand for electric cars in Germany is weakening
Meanwhile, the German car industry remains calm. Both suppliers and the companies themselves are keeping a close eye on Chinese competition, but continue to rely on German technology and the importance of time-honored brands. It is unclear whether the self-confidence shown is more than urgently needed self-assurance.
The fact is, however, that converting production is complex and expensive, and demand in Germany has been low so far. The Association of the Automotive Industry (VDA) even expects that the number of new registrations of electric cars will fall by 14 percent this year to 451,000 vehicles. It would be the first decline since the Federal Motor Transport Authority first counted electric cars in 2012.
Behind closed doors or behind closed doors, some people still sound concerned. Thomas Schäfer, VW brand and group board member, described the situation at Volkswagen in a briefing for managers as “precarious.”
A difficult area of tension for manufacturers, especially because the federal government has announced ambitious goals. By 2030, 15 million electric cars are expected to be on German roads.
Will there be German-French cooperation against China?
The head of the VW works council, Daniela Cavallo, recently expressed similar skepticism. “Politicians must also support this, and not just set guidelines that are correct,” she said on Monday. The short-term end to e-car financing last year didn’t help, nor did the discussions about openness to technology (keywords e-fuels and hydrogen propulsion). This only creates new uncertainty, Cavallo criticized.
As for his own brand, Cavallo admitted that an affordable entry-level electric model is still missing. “In my opinion, we absolutely need a vehicle under $20,000,” she said. “Volkswagen is a company that must offer broad mobility. And in that respect, we miss that in our portfolio and that is absolutely necessary.”
VW and Renault plan small electric cars
A step towards a more cost-effective European model could come from collaboration. As announced on Monday, there are discussions between Renault and Volkswagen about cooperation.
The talks are about sharing the Renault Twingo platform, Renault boss Luca de Meo explained at the Geneva Motor Show. Reuters had heard from insiders that Renault would soon decide on a partnership for the electric Twingo. The French announced in November that they wanted to launch the new electric Twingo for a price of less than 20,000 euros. Volkswagen boss Oliver Blume had promised a 20,000 euro electric car for the second half of the decade.
Why Chinese manufacturers are entering Europe
The Chinese focus on Europe is no coincidence. On the one hand, the EU has decided to phase out combustion engines. In contrast, there are relatively low import duties of 10 percent. However, in the US, 25 percent is due.
In China itself, the auto industry is heavily subsidized, which was estimated to be worth $100 billion last year. The European Commission has long accused China of these subsidies keeping prices on the European market artificially low. She therefore investigates the extent to which international trade rules are violated and European manufacturers are disadvantaged.
“The price of these cars is artificially depressed by huge government subsidies – this distorts our market,” Commission President Ursula von der Leyen said in September. That is not acceptable. The investigation could lead to the imposition of punitive charges. The Ministry of Commerce in Beijing has criticized the start of the investigation. A result is still pending.
Source: Watson
I’m Ella Sammie, author specializing in the Technology sector. I have been writing for 24 Instatnt News since 2020, and am passionate about staying up to date with the latest developments in this ever-changing industry.
