BYD: China’s cheap car maker’s $10,000 EV disrupts global auto giants

In 2023, BYD recorded sales of 1.57 million EVs, displacing Tesla as the top choice for these new-generation no-emission cars. BYD’s rise is meteoric since the car company had managed only about 131,000 vehicle sales in 2020. Actually, before BYD’s cars became available for sale in the US, the carmaker announced discounts across its 100 existing models.

The sub-$10,000 EV

Under a new marketing campaign that says electricity is cheaper than oil, Shenzhen-based BYD has slashed prices of its all-electric and hybrid car models. Compared to December last year, the only cars that did not get a price reduction are those belonging to the newest brand, Yangwang, which includes supercars with a price tag of 1.68 million yuan (US$ 233,000).

At the other end of the price spectrum, BYD offers the Seagull, a hatchback priced at over 70,000 yuan (a little over US$10,000). In the recent price cuts, Seagull received a five percent discount and instantly became an EV available for less than $10,000.

This undercuts the price of base model EVs from US car makers by as much as $50,000. The company’s top-selling sedan vehicle, the Qin Plus, saw an even greater discount of 20 percent from its previous price and is now available at just under 80,000 yuan (a little over US$11,000).

Specifications-wise, the Seagull is slightly smaller than the Chevrolet Bolt EV, which has been discontinued. Its range of 190 miles (305 km) on a single charge is lower than the segment average, and its top speed of 80 miles (128 km) an hour isn’t impressive either.

Spooking automobile markets nonetheless

For Seagull to enter the EV market, BYD would need to comply with the federal requirements for vehicles in the US, which would further increase its costs. Even with these additions, the EV is expected to cost much less than the cheapest EV produced by a US company. Experts peg this number at least at $52,000, CNBC said in its report.

Last month, BYD announced that it would begin selling the Seagull in Mexico for 358,800 pesos (US$ 20,990). Currently, a Chinese-built EV attracts a 27 percent import duty in the US; BYD plans to set up manufacturing facilities in other countries such as Thailand, Brazil, Hungary, Uzbekistan, and even Mexico.

The company gains an edge in pricing by using its battery technology. Like Tesla, BYD adopted vertical integration and does not use expensive lithium-ion batteries in its EVs. Even as legacy carmakers are trying to replicate Tesla’s agile strategies to rapidly adapt to changing market needs, BYD has superseded Tesla from bringing disruptive new technologies to the market and doing so at scale.

This has delivered cost benefits, and BYD turns a small profit even on the lowly-priced Seagull. The company now wants to reach out to potential buyers in tier-two cities and rural areas to switch to EVs, a South China Morning Post report said.

This is not just a threat for EV makers but also legacy car makers such as Toyota and Volkswagen, who have delayed their transition to EVs and are banking on internal combustion engines to rule the roost for the near future in remote areas that need more charging infrastructure.

By slashing its prices across its models, BYD is spooking the automobile sector, something that has not happened before.