LIVONIA, Mich. \u2014 A small electric vehicle is having a big impact on the global automotive industry.<\/p>\n
It\u2019s not the EV itself that\u2019s making waves but its price \u2014 and its potential to disrupt domestic auto industries around the world.<\/p>\n
The China-built\u00a0BYD\u00a0Seagull, 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.<\/p>\n
That\u00a0<\/em>latter point \u2014 EV profits where U.S. automakers have mostly failed to turn any \u2014 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.<\/p>\n The Seagull could be a \u201cclarion call for the rest of the auto industry,\u201d said Terry Woychowski, a former\u00a0General Motors\u00a0executive who now serves as president of automotive at engineering consulting firm Caresoft Global. \u201cIt\u2019s a significant event.\u201d<\/p>\n Though the Seagull isn\u2019t yet sold on U.S. soil, BYD is expanding its vehicles globally, and some believe it\u2019s only a matter of time before more China-made vehicles arrive in the U.S.<\/p>\n There\u2019s fear among global automakers that Chinese rivals like the\u00a0Warren Buffett-backed BYD\u00a0could flood their markets, undercutting domestic production and vehicle prices to the detriment of their own auto industries.<\/p>\n \u201cThe introduction of cheap Chinese autos \u2014 which are so inexpensive because they are backed with the power and funding of the Chinese government \u2014 to the American market could end up being an extinction-level event for the U.S. auto sector,\u201d the Alliance for American Manufacturing, a U.S. manufacturing advocacy group, said\u00a0in a report last month.<\/p>\n 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\u2019s largest producer of electric vehicles in late 2023.<\/p>\n The rise of BYD and other Chinese automakers led\u00a0Tesla\u00a0CEO\u00a0Elon Musk\u00a0in January to warn that Chinese automakers\u00a0will \u201cdemolish\u201d global rivals\u00a0without trade barriers.<\/p>\n Bernstein reports BYD\u2019s growth, including sales of non-EVs, has come by shipping more vehicles outside China: Overseas markets accounted for about 10% of\u00a0BYD\u2019s more than 3 million sales last year, doubling that share from the beginning of the year.<\/p>\n BYD did not respond for a request for comment.<\/p>\n Driving the Seagull is no different than driving the Chevrolet Bolt, Nissan Leaf or BMW i3. It accelerates quickly. It\u2019s quiet. It has nice-looking screens and a mix of plastic and soft touch points, including sporty and comfortable seats.<\/p>\n The Seagull, also known as the BYD Dolphin Mini in Latin America, is slightly smaller than GM\u2019s\u00a0now-discontinued\u00a0Chevrolet Bolt EV.<\/p>\n 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\u2019s top speed of about 80 mph and just 74 horsepower dwindle in comparison with most EVs currently on sale in the U.S.<\/p>\n But its primary differences come in the construction, batteries and sourcing of parts, according to Caresoft.<\/p>\n The consulting firm tore apart the BYD Seagull piece by piece to benchmark the small EV against vehicles from other startups and traditional automakers. The Livonia, Michigan-based company, with several offices across the globe, has torn down and benchmarked more than 30 China-built EVs from the likes of BYD,\u00a0Nio, XPENG and others.<\/p>\n Caresoft\u00a0digitally and physically analyzes every part of a vehicle, from bolts and latches to seats, motors and battery casings. It then determines how its clients \u2014 mainly automakers and suppliers \u2014 can improve efficiencies and cut costs in their products.<\/p>\n Its initial study of the BYD Seagull found it to be efficiently and simplistically designed, engineered and executed, but with unexpected quality and anticipated reliability.<\/p>\n \u201cWhat they did do is done very well,\u201d Woychowski said. \u201cIt\u2019s efficiently done.\u201d<\/p>\n For the price it\u2019s a well-equipped vehicle. (BYD even lowered the starting price of the vehicle by 5% earlier this month, down from a roughly $11,000 price earlier this year.)<\/p>\n Despite the cheap price, the company still makes \u201csome money\u201d on the Seagull or at a minimum breaks even, Caresoft CEO Mathew Vachaparampil said during\u00a0an automotive conference\u00a0hosted by the Chicago Federal Reserve in January.<\/p>\n For BYD to sell the Seagull in the U.S., it would have to meet U.S. federal vehicle requirements that would add additional costs to the car. But the EV could likely still arrive on U.S. shores for tens of thousands of dollars cheaper than the current average price of an EV in the U.S., which\u00a0Cox Automotive reports is\u00a0more than $52,000.<\/p>\n BYD last month announced it\u00a0would begin selling\u00a0the Seagull\/Dolphin Mini EV in Mexico for 358,800 pesos (or about $20,990).<\/p>\n BYD has found success in its battery technology; internal sourcing, also known as vertical integration; and production of parts, according to Caresoft. Most notable is BYD\u2019s development of lower-cost battery technologies that are far cheaper to manufacture than lithium-ion batteries commonly used in U.S. EVs.<\/p>\n BYD, which stands for Build Your Dreams, first pioneered its \u201cBlade\u201d\u00a0battery technologies in smartphones\u00a0and has since grown into one of China\u2019s most well-known automakers.<\/p>\n Its focus on vehicle efficiencies is reminiscent of U.S. EV leader Tesla, which has likewise been able to drive down the cost of its vehicles over the years.<\/p>\n Traditional automakers are only now attempting to emulate some of Tesla\u2019s processes such as its gigacasting manufacturing process and vertical integration of crucial parts such as motors, batteries and other components. Tesla is also quick to adapt.<\/p>\n The Tesla Model 3, for example, no longer has a floor. Instead, the car\u2019s highly protected battery case takes the place of a traditional vehicle body at the base. That type of change, enacted at Tesla over the last several years, wouldn\u2019t typically take place at a traditional automaker until a full redesign of a vehicle.<\/p>\n BYD is similarly quick to adapt. The company has quickly rolled out new and updated products. It\u2019s also rapidly established manufacturing, as it has its eyes set on factories in Thailand, Brazil, Indonesia, Hungary, Uzbekistan and,\u00a0potentially, Mexico.<\/p>\n Add in other advantages such as government support, lower labor costs and rising production capacity, and the company poses a growing threat to global counterparts.<\/p>\n BYD\u2019s rise comes at a precarious time for global auto industry dynamics.<\/p>\n While China\u2019s automakers expand, America\u2019s traditional automakers have shrunk in both their domestic market and China.<\/p>\n Their decline in the U.S. has come with the arrival of Japanese automakers such as Toyota Motor, Nissan Motor and Honda Motor, as well as, more recently, South Korean auto giant Hyundai Motor and its Kia unit.<\/p>\n The so-called Big Three U.S. automakers \u2014 GM,\u00a0Ford\u00a0and Chrysler, now owned by\u00a0Stellantis\u00a0\u2014 have watched their U.S. market share deteriorate from 75% in 1984 to about 40% in 2023, according to industry data.<\/p>\n Politicians in the U.S., concerned about their local auto industries, have taken aim at Chinese imports and lawmakers in Europe\u00a0have launched a probe\u00a0into the rise of China-made EVs.<\/p>\n \u201cWe are very concerned about China bigfooting our industry in the United States even as we are building up now this incredible backbone of manufacturing,\u201d Energy Secretary Jennifer Granholm said March 6 during a\u00a0discussion panel\u00a0at an Axios event.<\/p>\n Republican Sen. Marco Rubio of Florida has proposed sharply boosting tariffs on Chinese vehicle imports by $20,000 per vehicle to stop the country \u201cfrom flooding U.S. auto markets.\u201d<\/p>\n Currently, Chinese-built EVs are subject to a 27.5% tariff when imported into the U.S. That includes a 2.5% tariff that generally applies to imported cars plus an additional 25% tariff introduced by the Trump administration in 2018 on China-made vehicles.<\/p>\n Chinese automakers could still build in Mexico, though, and import vehicles to the U.S. from\u00a0there through the USMCA, formerly the North American Free Trade Agreement, or NAFTA.<\/p>\n However, former President\u00a0Donald Trump\u00a0\u2014 the front-runner among Republicans in the 2024 presidential race \u2014 on Saturday suggested instituting a 100% tariff on cars made in Mexico\u00a0by Chinese companies,\u00a0should he be elected to a second term.<\/p>\n \u201cWhat we\u2019ve seen over time is automotive manufacturers eventually enter all the markets that matter \u2026 Ultimately the Chinese will come to the U.S.,\u201d said Marin Gjaja, chief operating officer for Ford\u2019s EV unit, during a\u00a0recent interview\u00a0with CNBC.<\/p>\n Gjaja said while Ford can\u2019t control regulations or Chinese expansion, it can \u201cget really, really competitive on the technologies that customers want\u201d and get more efficient to win customers.<\/p>\n To compete with Chinese brands such as BYD, Woychowski contends traditional automakers must learn, unlearn and change quickly.<\/p>\n He said companies such as the Detroit automakers each have a century of procedures, standards and other workflows that they must rethink to better compete against Chinese automakers before vehicles such as the BYD Seagull land on U.S. shores.<\/p>\n \u201cYou have to learn. You have to unlearn and you have to do it quickly,\u201d he said. \u201cBecause you\u2019ve been doing something for 100 years, doesn\u2019t mean you should keep doing it. It\u2019s no longer appropriate.\u201d<\/p>\n <\/p>\n LIVONIA, Mich. \u2014 A small electric vehicle is having a big impact on the global automotive industry. It\u2019s not the EV itself that\u2019s making waves but its price \u2014 and its potential to disrupt domestic auto industries around the world. The China-built\u00a0BYD\u00a0Seagull, a small all-electric hatchback, starts at just 69,800 yuan (or less than $10,000), […]<\/p>\n","protected":false},"author":0,"featured_media":2378,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-2377","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/2377","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/comments?post=2377"}],"version-history":[{"count":0,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/2377\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media\/2378"}],"wp:attachment":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media?parent=2377"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/categories?post=2377"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/tags?post=2377"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}