Why a small China-made EV has global auto execs and politicians on edge

 

A BYD Seagull small electric car is on display during the 20th Shanghai International Automobile Industry Exhibition at the National Exhibition and Convention Center (Shanghai)

Vcg | Visual China Group | Getty Images

LIVONIA, Mich. – A small electric vehicle is having a big impact on the global automotive industry.

It’s not the EV itself that’s making waves but its price — and its potential to disrupt domestic auto industries around the world.

The China-built BYD Seagull, a small all-electric hatchback, starts at just 69,800 yuan (or less than $10,000), and reportedly banks a profit for the increasingly influential Chinese automaker.

That latter point — EV profits where U.S. automakers have mostly failed to turn any — combined with the expansion of Chinese automakers into Europe, Latin America and elsewhere has automotive executives and politicians, from Detroit and Texas to Germany and Japan, on edge.

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

Though the Seagull isn’t yet sold on U.S. soil, BYD is expanding its vehicles globally, and some believe it’s only a matter of time before more China-made vehicles arrive in the U.S.

Terry Woychowski, president of automotive at engineering consulting firm Caresoft Global, inside the company’s large teardown and benchmarking facility in Livonia, Michigan.

Caresoft Global

There’s fear among global automakers that Chinese rivals like the Warren Buffett-backed BYD could flood their markets, undercutting domestic production and vehicle prices to the detriment of their own auto industries.

“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,” the Alliance for American Manufacturing, a U.S. manufacturing advocacy group, said in a report last month.

BYD sold 1.57 million battery EVs last year, up from just 130,970 all-electric vehicles in 2020. That sales growth was enough to surpass Tesla to become the world’s largest producer of electric vehicles in late 2023.

The rise of BYD and other Chinese automakers led Tesla CEO Elon Musk in January to warn that Chinese automakers will “demolish” global rivals without trade barriers.

Inside Caresoft’s EV area for benchmarking and teardown at its facility in Livonia, Michigan.

Caresoft

Bernstein reports BYD’s growth, including sales of non-EVs, has come by shipping more vehicles outside China: Overseas markets accounted for about 10% of BYD’s more than 3 million sales last year, doubling that share from the beginning of the year.

BYD did not respond for a request for comment.

How the Seagull stacks up

Driving the Seagull is no different than driving the Chevrolet Bolt, Nissan Leaf or BMW i3. It accelerates quickly. It’s quiet. It has nice-looking screens and a mix of plastic and soft touch points, including sporty and comfortable seats.

The Seagull, also known as the BYD Dolphin Mini in Latin America, is slightly smaller than GM’s now-discontinued Chevrolet Bolt EV.

Its reported range of up to roughly 190 miles on a single charge (or 250 miles for certain models), is below that of many EVs on sale today in the U.S. but in line with many first-generation all-electric vehicles. The vehicle’s top speed of about 80 mph and just 74 horsepower dwindle in comparison with most EVs currently on sale in the U.S.

But its primary differences come in the construction, batteries and sourcing of parts, according to Caresoft.

Caresoft, an engineering benchmarking and consulting firm, has already torn down one China-built BYD Seagull and is preparing to do another.

Michael Wayland / CNBC