No desired effect

The percentage of tax on electric vehicles in China varies from country to country. The highest rate reaches 100 percent and is applied, for example, by the United States and Canada. In the EU, they are more lenient: there the tax varies from 17.4% (for BYD cars) to 38.1% (for SAIC company).

But the Nikkei writes: BYD will still have the cheapest EV in the US despite new 100% tariffBYD’s cheapest offering would dwarf all U.S. automakers by under $25,000, according to a new report.

Why was BYD successful?

After the end of internal combustion engine car production in March 2022 BYD is at the forefront of the industry’s transition to electric vehiclesThe company has been building its supply chain longer than any other EV company today. It began producing lithium-ion batteries in 1996, supplying batteries for Motorola and Nokia smartphones.

These early investments in the battery sector helped BYD become the industry giant it is today. Since the company launched its groundbreaking battery, the Blade EV, in 2020, continues to implement more efficient and cheaper technologies to reduce pricesInstead, technology, such as Tesla, is younger, has not yet had time to go through the process of becoming cheaper, and therefore the company’s cars are much more expensive.

BYD’s cheapest electric car, the Seagull EV, is priced at less than $10,000 (RMB 69,800) in China. The company’s affordable electric and hybrid models are increasingly replacing foreign automakers’ gasoline-powered vehicles in the Chinese car market.

Advantages of Chinese companies

Chinese automakers like BYD have the advantage because of their well-established supply chains, which have allowed for lower prices. Users in that country are showing much greater demand for electric cars, which has allowed for increased manufacturing and mass production. In the US, by contrast, users are still clinging to gasoline-powered cars.

• Electric vehicles accounted for more than 50% of passenger car sales in China in July.
• According to the latest data from S&P Global Mobility, electric vehicles accounted for only 8.5% of the passenger car market in the US during the same period.

Chinese companies, including BYD and CATL, also dominate the global battery market. CATL (35.9%) and BYD (16.5%) led global EV battery sales by shipment in the second quarter, according to SNE Research.

In the first eight months of 2024, CATL accounted for 37.6% of the global EV battery market, while BYD ranked second with 16.1%.

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Cheaper than others

All of this, along with Chinese subsidies, will allow BYD to offer the cheapest electric car in the U.S. despite the new 100% import tariff, AutoForecast Solutions CEO Joe McCabe said in an interview with Nikkei.

The tariff will come into effect September 27 It is designed to “protect American manufacturers from China’s unfair trade practices,” according to a White House press release.

McCabe said BYD’s cheapest electric vehicle, the Seagull EV, would cost $12,000 in the U.S. At a 100% tariff, that amount translates to: $24,000 – which is still cheaper than what the American auto industry offers.

Tesla, which still leads the US electric car market (48% share in July), has yet to pass the threshold. $30,000We do not mention other manufacturers at all because their products are mostly considered premium.