The top electric vehicle (EV) maker in China has lowered the price point on some of its models and is eyeing an expansion into western markets, competing directly with sales of gas cars, according to The Wall Street Journal.
BYD slashed its prices on many of its vehicles by more than 10%, putting it in competition with some brands like Volkswagen and Toyota, which have gas-powered cars now at similar price points, according to the WSJ. The EV maker had around 77% of its revenue come from the domestic Chinese market in 2023, but Goldman Sachs expects that to drop to 64% as the company moves to sell more vehicles abroad. (RELATED: Upscale Rideshare Platform Abandons Commitment To All-Electric Fleet After Missing Mark)
BYD has recently looked at establishing new EV factories in Mexico in order to enter the U.S. market, which already has steep tariffs on the industry that could be circumvented through production in North America, according to Reuters. The U.S. auto sector could be in danger if cheap Chinese cars were to flood the U.S. market.
China assumed the spot of the world’s largest auto exporter last year, expanding sales of gas-powered cars in the Russian, Brazilian and Thai markets, according to the WSJ. BYD has targeted the foreign markets with plug-in hybrids that require smaller batteries and are cheaper to make due to smaller battery sizes.
Media reporting that EV adoption is in reverse is not evident in our monthly tracking. Global deliveries of BEVs and PHEVs increased by 3,66 million units over 2022 and all monthly sales were between 8 % and 52 % higher.https://t.co/SJSC1iS3lf pic.twitter.com/DMDOlhLctm
— Viktor Irle (@viktorirle) February 27, 2024
BYD is facing internal pressure to diversify outside of the Chinese market due to a glut of Chinese car manufacturers, currently totaling around 180 different brands, according to the WSJ. One-third of all cars sold in the Chinese market are EVs.
Tesla was recently dethroned by BYD as the worldwide leader in the EV market, despite both having record sales in the fourth quarter of 2023. BYD has ties to the Chinese Communist Party through its involvement in the country’s Belt and Road Initiative, which aims to expand Chinese influence.
China is uniquely capable of commanding the EV market due to government backing and access to low-cost batteries and labor, giving the country’s automakers the ability to produce cheaper, lower-quality vehicles. Western automakers have struggled to reach profitability on their EV operations, with General Motors reporting a $1.7 billion loss in the fourth quarter and Ford losing $4.7 billion in 2023 on EVs.
BYD did not immediately respond to a request to comment from the Daily Caller News Foundation.
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