Chinese EV brands expanding to global markets

Osamu Furukawa has driven lots of Japanese cars for his business converting classic gasoline-powered models to electric. But his favorite ride is an import: A battery-powered SUV from China’s BYD Auto.

BYD Auto is part of a wave of Chinese electric car exporters that are starting to compete with Western and Japanese brands in their home markets. They bring fast-developing technology and low prices that Tesla Inc.’s chief financial officer says “are scary.”

Furukawa said he ordered an ATTO 3 when it went on sale Jan. 31, for its user-friendly features and appealing price of 4.4 million yen ($33,000) — or about one-quarter less than a Tesla.

“It’s perfect,” Furukawa said in his office in Yokohama, southwest of Tokyo.

Other ambitious Chinese EV exporters include NIO, Geely Group’s Zeekr and Ora, a unit of SUV maker Great Wall Motors.

Some compete on price. Others emphasize performance and features, putting pressure on Western and Japanese premium brands.

NIO Inc., which has persuaded buyers in China to pay Tesla-level sticker prices of up to 555,000 yuan ($80,000), says its latest SUV goes on sale this year in Europe. The ES6 boasts voice-activated controls and a range of 610 kilometers (380 miles) on a charge.

“We are very confident the ES6 will compete in this premium SUV market,” NIO’s founder and CEO, William Li, said in an interview at the Shanghai auto show.

Sales of battery-powered vehicles and gasoline-electric hybrids in China almost doubled last year to 6.9 million vehicles, or half the global total.

That was supported by multibillion-dollar subsidies from the ruling Communist Party, which is trying to make China a creator of clean energy and other technologies. That rattles U.S. and European leaders who see China as a strategic and industrial competitor.

Chinese brands are “serious competition,” according to David Leah, an analyst for GlobalData.

They have “more competitive battery technology” and can “achieve greater economies of scale,” Leah said in an email.

BYD Auto, owned by battery maker BYD Co., edged ahead of Tesla in total 2022 sales at 1.9 million vehicles. Half were gasoline-electric hybrids, while Tesla’s fleet is pure electric.

Chinese brands are developing EVs to compete without subsidies as Beijing shifts the burden to the industry by requiring them to earn credits for selling electrics. Prices start as low as 100,000 yuan ($14,500) for a compact SUV with a 400-kilometer (250-mile) range on one charge.

CEO Carlos Tavares of Stellantis, the parent company of Chrysler, Peugeot and FIAT, warned in January that Europe needs a strategy to compete with China’s lower prices. European-made electrics cost 40% more than Chinese models, according to Tavares.

“It’s a very bleak scenario,” Tavares told German magazine Automobilwoche. “But it doesn’t have to go that way.”

BYD Auto’s exports quadrupled last year to 55,916 sedans, SUVs and hatchbacks. Most went to India, Thailand, Brazil and other developing markets. BYD announced a 1,000-vehicle sale last year to Mexico’s VEMO for the biggest EV taxi fleet outside China.

State-owned BAIC, headquartered in Beijing, said a dealer in Jordan ordered 1,000 units of its compact EU5 sedan in January. The company said it plans to launch two to three more electric vehicles in Latin America, Southeast Asia and Europe.

What about the United States, the biggest, richest market?

Chinese EV brands are skittish about a sprawling country that demands big investments in dealerships and charging networks, especially while Washington and Beijing are feuding over security, technology and human rights.

“This is not an easy task,” said NIO’s Li. “Our products and services need to be prepared.”

BYD Auto has been in the U.S. market for a decade selling battery-powered transit buses assembled at a factory northeast of Los Angeles. It is “still in the process” of deciding whether to sell SUVs and sedans to Americans, the company said in a written response to questions.