Chinese Automaker BYD's Low-Cost Electric Car Threatens US Auto Industry

Chinese automaker BYD has launched the Seagull, a low-priced electric car that rivals US-made EVs in quality, selling for around $12,000 in China. The Seagull's emergence poses a threat to the US auto industry, with experts warning of potential disruption to the global market.

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Aqsa Younas Rana
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Chinese Automaker BYD's Low-Cost Electric Car Threatens US Auto Industry

Chinese Automaker BYD's Low-Cost Electric Car Threatens US Auto Industry

Small, well, built Chinese automaker BYD has launched a tiny, low-priced electric car called the Seagull that has American automakers and politicians trembling. The Seagull sells for around $12,000 in China, but drives well and is built with craftsmanship that rivals US-made electric vehicles costing three times as much. A shorter range version costs under $10,000.

Why this matters: The emergence of low-cost EVs from China could significantly disrupt the global auto industry, leading to a shift in market dynamics and potentially threatening the jobs of thousands of workers in the US auto sector. As the world transitions to electric vehicles, the ability of countries like China to produce high-quality, affordable EVs could reshape the industry's landscape and have far-reaching economic implications.

Small, well, built, called, poses, big, threat, us Tariffs on imported Chinese vehicles will keep the Seagull out of America for now, and it would likely sell for more than $12,000 if imported. The Biden administration is expected to announce 100% tariffs on electric vehicles imported from China, citing a threat to US jobs and national security.

The rapid emergence of low-priced EVs from China could shake up the global auto industry in ways not seen since Japanese makers arrived during the oil crises of the 1970s. BYD's entry into the US market is considered inevitable. "Any car company that's not paying attention to them as a competitor is going to be lost when they hit their market," said Sam Fiorani, a vice president at AutoForecast Solutions.

The Small, built, called, poses, big Alliance for American Manufacturing says in a paper that government-subsidized Chinese EVs could end up being an "extinction-level event" for the US auto sector. Tesla CEO Elon Musk has stated that "Chinese EVs are so good that without trade barriers, they will pretty much demolish most other car companies in the world."

The Seagull's low cost is attributed to BYD's battery-making expertise, largely using lithium iron phosphate chemistry, which costs less but has lower range than most current lithium-ion batteries. BYD also makes many of its own parts, including electric motors, dashboards, and bodies, using its huge scale (3 million vehicles sold worldwide last year) for cost savings. The car's design is focused on cost and efficiency, with features like a single windshield wiper, eliminating one motor and one arm, saving on weight, cost, and labor to install.

The Seagull has a quality feel, with solidly closing doors, gray synthetic leather seats with matching body color stitching, six air bags, and electronic stability control. A brief drive showed that it runs quietly and handles curves and bumps as well as more costly EVs.

BYD would have to modify its cars to meet US safety standards, which are more stringent than in China. Terry Woychowski, President of Caresoft Global, estimates that this would add $2,000 to the cost. BYD is still deciding whether to sell autos in the US, weighing factory sites in Mexico for the Mexican market.

The emergence of low-priced EVs from China like BYD's Seagull poses a serious threat to the US auto industry. With a price tag of just $12,000 and quality rivaling costlier US-made EVs, the Seagull showcases China's rapidly advancing EV manufacturing capabilities. As Elon Musk warns, without trade barriers, Chinese EVs could "demolish" other car companies worldwide. The US auto sector faces an urgent need to adapt and compete in this shifting landscape or risk being left behind.

Key Takeaways

  • BYD's Seagull EV sells for $12,000 in China, rivaling US-made EVs costing 3x more.
  • Low-cost Chinese EVs could disrupt the global auto industry and threaten US jobs.
  • US tariffs on Chinese EVs may keep Seagull out of America, but BYD's entry is considered inevitable.
  • BYD's battery-making expertise and cost-saving design enable low prices without sacrificing quality.
  • Elon Musk warns that Chinese EVs could "demolish" other car companies worldwide without trade barriers.