BYD To Flood US With Cheap EVs, Like Toyota In the 1970s
China’s BYD, the largest EV company in the world by unit sales, plans to flood the US with cheap EVs, which could affect Tesla sales and ruin the domestic EV plans of global car manufacturers like Ford. BYD will not import these directly to the US. Instead, to block an effort by the administration to stop the sales of cars that have Chinese-made batteries, BYD will build the vehicles in Mexico.
EV Trouble —Lucid Is In Trouble
EV Prices —Too High In France
A rush of BYD imports will change the EV business in the US entirely. BYD makes vehicles that sell for well under $20,000, far below prices charged for EVs in the US today. It should remind the industry of Toyota’s wildly successful move into America in the 1970s.
Barron’s recently speculated about how long Tesla and other companies that sell EVs in the US will have before the flood of BYD vehicles. The answer may be that while Tesla can afford to bring price points down and continue to have profit margins, Ford and other high-cost manufacturers can do nothing to match BYD without substantial losses per vehicle. Ford recently said its new contract with the UAW would cost the company $8.8 billion over its life. Jim Farley, Ford’s CEO, said his company will “have to think carefully about our (manufacturing) footprint.” It is an acknowledgment that Ford’s cost is too high to compete in a world where competitors have a low labor cost.
The presence of BYD in the US should remind legacy car companies of when Toyota started to sell cars in America. This began in 1958. The push began in earnest in the late 1970s. In 1986, Toyota sold one million cars. Some months now, Toyota’s US sales trail only those of General Motors and often top Ford’s. Throughout this period, Toyota had lower labor costs than the US-based companies.
BYD has a chance to transform the US EV business. Once it starts building cars in Mexico, it can undercut US EV prices and maintain large margins.
