The new benchmark among electrics.
It seems like just yesterday that electric cars were the exclusive domain of Tesla. The American manufacturer was free to roam, but in recent years practically everyone has jumped on the bandwagon. Elon Musk's company holds its own in general terms, but the toughest competition comes from China and the “bogeyman” has its own name: BYD.
The Asian manufacturer is following its own motto (Build Your Dreams) and has become the best-selling brand in its domestic market, which is not trivial because many vehicles are sold in China; It has surpassed Tesla in electric car manufacturing volume and has already begun its expansion campaign.
In fact, in this company they are quite clear about their position and where they want to go, take as an example what their slogan is: “The biggest car brand you've never heard of.”
The point is that fewer and fewer people can admit to having never heard of it, especially if they belong to the automotive sector, since it is already present in the main European markets and has achieved a fairly good positioning there, achieving a perception of quality that distances it from some of its compatriots.
It is a fact that BYD is increasingly gaining ground on Tesla, but what are the reasons for this? Let's go with what we consider to be the main reasons why he is achieving this.
Production costs
Being a Chinese manufacturer has enormous advantages, one of the main ones being being able to carry out production in a country where production costs are much lower than in other nations in the world.
A clear example is the cost of labor, which already makes a notable difference and allows vehicles to be put on the market at much more affordable prices than those of rivals.
Not only that, the Chinese government also offers enormous financial aid to its national electric car brands, something that has caused other regions to even accuse them of unfair competition, as is the case in Europe, and to consider options such as tariffs.
In the case of Tesla, it can cut back to a certain extent and, in fact, in the price war it has started to make things difficult for its rivals, it is even going to a loss to gain customers and continue increasing its sales volume.
Vertical integration
Controlling most of the production process of your cars is a very good way to control the prices of your vehicles.
At this point, BYD has a point in its favor that Tesla cannot measure up to: the Chinese manufacturer produces its own batteries, controlling the supply chain process from the beginning until it shapes the batteries.
Furthermore, it is not something that it does on a small scale, and today it is the world leader in the production of rechargeable batteries throughout the world.
In comparison, Tesla depends on external suppliers, among which are the Japanese Panasonic, the Korean LG or the Chinese CATL. This represents a disadvantage that can hardly be overcome.
Cars at very cheap prices
Price continues to be one of the biggest barriers to entry when we talk about electric cars. Many brands are developing affordable models, but it seems practically impossible, especially as mentioned in the first point, that they can match the Chinese brands.
In the case of BYD and Tesla, the former has a really wide range of models, with very varied approaches, ranging from premium models to others that are really cheap, which means that it covers a huge market and offers its customers potential customers options that include cars whose rates cannot be matched.
In Spain, its most affordable model is the BYD Dolphin, which is available from 35,690 euros. This is a fairly even amount with the Tesla Model 3, the cheapest car from the American brand, which costs 39,990 euros, but has greater autonomy.
The point is that, until the arrival of the much-rumored Tesla Model 2, which should still cost around 20,000 euros, BYD has been cashing in on the Seagull for some time, a vehicle that is not known if it will arrive in Europe, but that will be available in China. It sells “like churros” thanks to a price that amounts to around 9,000 euros at the exchange rate.
And for that ridiculous rate we are talking about a 3.78 meter utility vehicle, with a 75 HP engine, a 30 kWh battery and just over 300 km of autonomy. In short, a fairly good car, but for the ridiculous amount it costs, it is considered a really good purchase. It is something that Tesla cannot compete with (nor will it be able to in the medium term either).