Chinese EV Brands Set to Revolutionize the Industry Continues Global Expansion

Osamu Furukawa has driven lots of Japanese vehicles for his business changing from classic gasoline-powered models to electric. But an import is his favorite ride: a battery-powered SUV made by BYD Auto in China.

BYD Auto is one of a growing number of Chinese exporters of electric cars that are beginning to compete with Western and Japanese brands in their home markets. Their low prices and rapidly evolving technology, according to Tesla Inc.’s chief financial officer, “are scary.”

Furukawa stated that he placed an order for an ATTO 3 when it went on sale on January 31 due to its appealing price of 4.4 million yen ($33,000), or approximately one-quarter of the cost of a Tesla.

In his office in Yokohama, which is southwest of Tokyo, Furukawa stated, “It’s perfect.”

NIO, Zeekr, a subsidiary of the Geely Group, and Ora, a division of the SUV manufacturer Great Wall Motors, are additional zealous Chinese exporters of EVs.

Price is a factor for some. Others place an emphasis on features and performance, putting pressure on premium Western and Japanese brands.

NIO Inc., which has convinced purchasers in China to address Tesla-level sticker costs of up to 555,000 yuan ($80,000), says its latest SUV goes on sale this year in Europe. The ES6 flaunts voice-activated controls and a range of 610 kilometers (380 miles) on a charge.

In an interview at the Shanghai auto show, NIO’s founder and CEO, William Li, stated, “We are very confident the ES6 will compete in this premium SUV market.”

The number of gasoline-electric hybrids and battery-powered vehicles sold in China nearly doubled last year to 6.9 million, or half the global total.

That was supported by multibillion-dollar subsidies from China’s ruling Communist Party, which wants to turn the country into a producer of clean energy and other technologies. Leaders in the United States and Europe, who view China as a strategic and industrial competitor, are alarmed by this.

GlobalData analyst David Leah says that Chinese brands are “serious competition.”

Leah stated in an email that they can “achieve greater economies of scale” and possess “more competitive battery technology.”

In total sales in 2022, BYD Auto, which is owned by the battery manufacturer BYD Co., sold 1.9 million more vehicles than Tesla. Half were fuel-electric crossbreeds, while Tesla’s fleet is pure electric.

During a conference call with financial analysts on January 25, Tesla CEO Elon Musk stated, “We have a lot of respect for the car companies in China. They work the hardest and they work the smartest..”

As Beijing forces the industry to earn credits for selling electric vehicles, Chinese brands are developing EVs to compete without subsidies. A compact SUV with a 400-kilometer (250-mile) range on a single charge can be had for as little as 100,000 yuan (14,500 USD).

“The Chinese are scary,” Tesla CFO Zachary Kirkhorn said on the analyst call.

Chinese electric vehicle manufacturers combine factories in China with research and design centers in Europe and the United States.

This year, Geely’s Zeekr intends to launch an all-electric sedan and SUV in the Netherlands and Sweden. While its factories are in China, its mini-United Nations of Chinese and European designers is in Gothenburg, Sweden, adjacent to Volvo Cars, another Geely brand.

“Our ambition is to be a key player in electrified mobility in Europe within this decade,” said Zeekr CEO Spiros Fotinos, a Toyota and Lexus veteran. With a “clear global ambition,” he said, “we’re looking at the opportunities and right timing for other markets.”

Stellantis CEO Carlos Tavares warned in January that Europe needs a strategy to compete with China’s lower prices. Stellantis is the parent company of Chrysler, Peugeot, and FIAT. Tavares says that electric cars made in Europe cost 40% more than Chinese models.

Tavares stated to the German magazine Automobilwoche, “It’s a very bleak scenario. But it doesn’t have to go that way.”

Last year, BYD Auto exported 55,916 sedans, SUVs, and hatchbacks, a quadruple increase. The majority went to developing markets like India, Thailand, and Brazil. BYD declared a 1,000-vehicle deal last year with Mexico’s VEMO for the greatest EV taxi fleet outside China.

State-owned BAIC, headquartered in Beijing, said a dealer in Jordan ordered 1,000 units of its reduced EU5 car in January. The organization said it intends to launch two to three more electric vehicles in Latin America, Southeast Asia, and Europe.

What about the United States, the biggest, richest market?

When Washington and Beijing are at odds over security, technology, and human rights, Chinese electric vehicle manufacturers are wary of a sprawling country that requires significant investments in dealerships and charging networks.

Li of NIO stated, “This is not an easy task. Our products and services need to be prepared.”

BYD Auto has been in the U.S. market for a decade selling battery-powered transit buses gathered at a factory northeast of Los Angeles. In a written response to questions, the company stated that it is “still in the process” of deciding whether to sell SUVs and sedans to Americans.

Leah stated that political tensions in the United States “makes it difficult for a Chinese company to launch, EV or otherwise” there.

Great Wall’s Ora sells its 03 models in Europe for $140,000, or $20,000. By advertising its cars as being made for women, their body sizes, and their daily needs, Ora aims to stand out from the dozens of other emerging brands.

“This is a second or third car for a household. It can be used by a wife or daughter to commute to work, to go out with friends, or to go shopping,” said Ora’s deputy general manager, Tan Jian.

BYD Auto has partnerships with dealership chains in the Netherlands, Sweden, Germany, and Britain in Europe. The organization says it likewise has delivered cars in Belgium, Denmark, and Austria. BYD claims that its partnership with SIXT, a European rental company, will result in sales of up to 100,000 vehicles over the next six years.

By the end of 2025, BYD Auto intends to have 100 showrooms in Japan. This year, the Dolphin Hatchback and Seal sedan are scheduled to arrive in Japan. Additionally, the company claims to have shipped around 4,000 ATTO 3s to Australia.

By replacing gasoline engines with batteries and electric motors, Furukawa’s OZ Co. converts Volkswagen Beetles and other classic models. Furukawa said he drives his ATTO 3 every day and has gone similar to Osaka, 400 kilometers (250 miles) away.

Toyota, Nissan, BMW, Volkswagen, and Chevrolet dealerships line the perimeter of BYD Auto’s Yokohama showroom, which opened on February 2.

A married father of one said that he looked at Japanese models before purchasing an ATTO 3 due to its roominess and affordability.

“I like the ride, and it’s easy to drive,” said the buyer, who asked to be identified only by his surname, Ohta. “There are so many good features.”

Because China has a history of strained relations with Japan, Ohta’s father had a “negative reaction” regarding BYD’s origin. However, Ohta said his job in the electronic games industry has taught him to value Chinese innovation.

Ohta stated, “They are coming out with excellent products. I have respect for the nation.”