Thursday, April 25, 2024
NewsEVs : The Chinese auto industry will change the game in North...

EVs : The Chinese auto industry will change the game in North America

  • BYD could be one of the first Chinese brand to establish itself in North America.

  • Ford and Tesla are currently working on cheaper entry models


 

The question is not whether Chinese automakers will come to North America, but when. This thorny question is one that many North American CEOs from already established auto brands have been asking themselves quite often for some time now.

It’s true that the usual automotive brands in North America have the advantage of brand recognition and, very often, the history attached to an X badge or a Y brand. In this respect, Chinese brands still have a lot to prove, but despite everything, these Chinese manufacturers have an undeniable advantage over their Western rivals: price.

2024 BYD Seagull | Photo: BYD

Recently, Chinese car giant BYD (for Build Your Dreams) unveiled the Seagull, an electric car with a base price of $9,698 (in US dollars). Currently, the city car is being sold not only in its local market, but also in Brazil and Mexico – in short, on the doorstep of the United States market.

For the time being, all electric vehicles sold in North America command a pretty penny up front, with the average selling price of an EV in the U.S. currently approaching $60,000, according to statistics gathered by Edmunds. The same publication also revealed that the average selling price in China for an EV is around $30,000. In short, these figures confirm that “traditional” car brands have their work cut out for them, because even if there is a protest movement over the arrival of these Chinese manufacturers on the continent, the production capacity of these brands is simply too strong for them to limit themselves to their local market, despite the latter’s impressive size.

2024 BYD Seagull | Photo: BYD

In fact, BYD is currently looking to establish itself in Mexico, a move that would enable it to knock on the door of the American market, without having to pay the steep tariffs imposed by the American government on Chinese products. By setting up an assembly plant on Mexican soil, BYD could avoid paying the penalties imposed on most vehicles assembled in China – Volvo and Polestar are an exception for the time being. The Chinese automotive giant would also be based in a market where there are already several established suppliers and even an experienced and more affordable workforce than in the US or Canada. The Free Trade Agreement between Mexico, the United States and Canada is therefore crucial for Chinese automakers.

Chinese competition may be viewed negatively by some, but it’s also good for the average consumer who can’t afford a compact crossover costing more than $50,000 after application of financial incentives that, in any case, will disappear over the years.

2024 BYD Seagull | Photo: BYD

In fact, Tesla and Ford, to name but two, are already working on electric models with a starting price of $25,000 in U.S. dollars, a much more attainable threshold for the average person. And other players will be joining this offensive for less expensive electric vehicles to better compete with Chinese brands, but also to offer zero-emission vehicles to a greater number of consumers.

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