Chinese EV maker BYD Company (BYDDY, 1211.HK) cut the cost of its cheapest vehicle, the Seagull EV Honor Edition, now starting at $9,700 (converted from the Chinese yuan). This marks the latest chapter of the price war between electric vehicle manufacturers in the Chinese market. Tesla (TSLA) announced price cuts for its Model 3 and Model Y through March for customers in the region.
Yahoo Finance Senior Autos Reporter Pras Subramanian comments on BYD’s exposure in select markets, touching upon allegations of the Chinese government’s involvement in bolstering the nation’s EV industry.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Editor’s note: This article was written by Luke Carberry Mogan.
Video Transcript
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RACHELLE AKUFFO: The EV pricing war escalating in China with BYD slashing the cost of of its least expensive vehicle. Yahoo Finance’s Pras Subramanian joins us with the details. Now, this isn’t the first time. BYD has been rolling out a series of these cuts.
PRAS SUBRAMANIAN: Yeah, you know, this follows a price cut that they had for one of their other EVs known as the– I got to look this up here. The Yuan Plus crossover got that price cut, excuse me, on Monday. Now we’re seeing the Seagull, the cheapest EV and new updated version of it, cutting the price by 5% here to just under $10,000. This a new updated version of their entry-level EV. And I’m shocked that the BYD can make money off this thing because it’s so cheap.
You know, like I mentioned before, it also comes after the other price cut for the BYD Yuan Plus. And also this week, Tesla cut prices for its China offerings on Model 3 and Model Y. So a big brewing price war here coming in China. And BYD is just the latest example of another– the top maker there, EV maker in China, having to actually bring prices down too.
AKIKO FUJITA: I mean, $9,600 for an EV, right? I mean, that is just tough to compete. And you have heard from so many of these Western carmakers about the concern about BYD taking those kind of prices to other markets. Obviously, they’ve already been importing into places like Europe, but it looks like the EU is considering some additional tariffs.
PRAS SUBRAMANIAN: Yeah, that’s right. They’re concerned that they have new evidence that shows that the Chinese government is, sort of, illegally supporting these EV makers in China using things like direct transfer funds, tax breaks, provisions of goods and services at a cheaper below market price to help and aid their local Chinese EV makers. And then that’s sort of in violation of potentially trade agreements that Europe has with China and places like that.
Currently, the EU tariff on Chinese EVs is around 10%. We’ll see if that rises and potentially it will. And in the States, we have a 27.5% tariff on Chinese cars.
And Akiko, I know you spoke to BYD’s US head here and she had mentioned how they did not want to come to the US market at least at this time, right? So there’s a little bit of an interesting, kind of, back and forth there. We’re seeing EU now kind of stepping up protectionist efforts. Are we going to see more in the US?