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Why a Small EV Made in China Is Impacting the Global Vehicle Industry – RetailWire

Why a Small EV Made in China Is Impacting the Global Vehicle Industry - RetailWire

Photo by P. L. on Unsplash

The BYD Seagull, manufactured in China, is a small fully electric hatchback with a starting price of 69,800 yuan (less than $10,000), and it could disrupt the automotive industries across the globe due to its attractive price tag and the fact that BYD is reportedly profiting from it.

The prospect of electric vehicle profitability, an area where U.S. automakers have struggled, along with the growing presence of Chinese automakers in markets like Europe and Latin America, has left automotive executives and politicians worldwide feeling uneasy.

Terry Woychowski, a former General Motors executive who is now the president of automotive at engineering consulting firm Caresoft Global said that the Seagull could be a “clarion call for the rest of the auto industry.” He added, “It’s a significant event.”

Even though the Seagull isn’t available for sale in the U.S. yet, BYD is making its way across the globe, and some believe it won’t be long before more vehicles made in China enter the U.S. market.

Concerns have risen among global automakers that Chinese competitors such as BYD, which is backed by Warren Buffett, could dominate their markets, impacting domestic production and automobile prices and ultimately dampening their industries.

In a report last month, the Alliance for American Manufacturing, a U.S. manufacturing advocacy group, said, “The introduction of cheap Chinese autos — which are so inexpensive because they are backed with the power and funding of the Chinese government — to the American market could end up being an extinction-level event for the U.S. auto sector.”  

In 2023, BYD sold 1.57 million battery EVs, which was a rise from 130,970 vehicles in 2020. The growth in sales was enough to take over Tesla’s spot in the market, and it became the world’s largest producer of electric vehicles toward the end of 2023.

The expansion and increase of BYD and other Chinese vehicle manufacturers led Tesla’s CEO Elon Musk to issue a warning in January. “Frankly, I think, if there are not trade barriers established, they will pretty much demolish most other companies in the world,” he said.