The Shanghai Auto Show buzzed with a variety of new vehicles, mainly electric or plug-in hybrids of all shapes, sizes and prices. But it was a cheap little electric vehicle that caught my eye watching from Europe; introducing the BYD seagull.
Not only does this small car have a local price starting at $11,300, but it may contain interesting new battery options, such as BYD’s lithium-ion phosphate “Blade” or, according to the investment researcher Evercore ISI, a sodium ion battery.
Sodium-ion batteries are said to be less prone to fires and cheaper because they use abundant sodium instead of scarce lithium.
The European electric vehicle market has made impressive progress over the past 5 years. Schmidt Automotive Research says sales in Western Europe jumped from a 2.5 percent market share in 2019 to about 15 percent by the end of this year, or an estimated 1.6 million sedans and SUVs .
This progress has been fueled by government subsidies, EU regulations and the embrace of affluent early adopters. This has resulted in an unbalanced market. Prices start at about $25,000 after taxes, but upwards of $35,000 to $40,000. This effectively excludes the average wage earner, who until recently has been served by cheap cars like the Ford Ka, Citroen C1, Peugeot 108, SEAT Mii and Renault Twingo. Manufacturers say they can’t make these small cars for the mass market and make a profit because of EU rules.
Zeekr X SUV (Photo by VCG/VCG via Getty Images)
VCG via Getty Images
As EU regulations tighten towards the ultimate goal of a total ban on new internal combustion engine (ICE) vehicles by 2035, European car buyers at the lower end of the market are being Excluded. Local manufacturers have so far failed to meet this demand. The big HongGuang MINI, made in China by a joint venture between General Motors of the US, China’s SAIC and Wuling, was thought to be on the verge of launching a Europeanized version, but that plan appears to have stalled.
BYD, which announced the new Seagull will offer a range of 190 or 252 miles, did not say whether it would be sold in Europe. But BYD has big ambitions here. It introduced the Dolphin compact hatchback for Europe earlier this month, priced at $33,000 after tax, and has already launched the Seal mid-size sedan, the Atto 3 compact SUV, the Han large sedan and the large SUV Tang.
Wouldn’t the seagull be a serious contender to fill this gap in the market?
Professor Ferdinand Dudenhoeffer, director of Germany’s Center for Automotive Research (CAR), is not so sure, saying Europeans are unlikely to be interested in simple vehicles.
“It looks interesting at first glance, but let’s talk about some details,” Dudenhoeffer said in an email exchange.
He said the Chinese market is different, with the big-selling Hongguang MINI offering a range of just 100 miles and less in cold weather.
“This does not work for us (the Europeans). In China, this is used by small businesses and more in the suburbs or rural areas. Do you remember the Tata Nano? It was supposed to be a revolution and ended up being a failure. Safety in small cars is a big issue in Europe, with airbags, reinforced doors, computer security, etc., Dudenhoeffer said.
The problem with most electric cars on the market is that they are not only very expensive, but are constantly and erroneously described as “affordable”. But they can’t compete with the all-round ability of the ICE car. Electric vehicles cannot compete with ICE cars in high-speed, long-distance cruising, for example.
Buyers at the lower end of the market need small, affordable electric vehicles. These vehicles would have no long-range pretensions and would concentrate on what electric power does best. They are unbeatable in urban mode for commuting, shopping and going to school. Charging would be done at home, so there would be no need for very expensive networks. The batteries would be small, so the benefits of CO2 would be greater. They would not need any subsidy.
Citroën Ami electric car.
getty
Would so-called “quadricycles” like the Citroën Ami and Microlino, which are not subject to the same EU safety regulations as normal cars, succeed at the cheaper entry level? Dudenhoeffer doesn’t think so, and hopes to see very affordable electric vehicles soon.
“The Microlino or the Citroën Ami are not cars. Not everything with 4 wheels has to be a car. I think we will see entry-level electric vehicles with 350 kilometers of range (218 miles) and (real car safety, connectivity and comfort) between €15,000 and €20,000 ($16,540 and $22,050),” Dudenhoeffer said.
The Shanghai Motor Show is focusing on battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs), Bernstein Research said.
“Of all new car launches, we estimate that about three-quarters of the launches are BEVs and PHEVs. Based on our observation, those of the most interest among domestic Chinese players include XPeng’s G6 SUV and Zeekr X, as well as the BYD’s Yangwang and Denza series. Among foreign brands, VW ID.7 and BMW iX1 also attracted more attention,” Bernstein said in a report.
Competition in the Chinese market is intensifying and local manufacturers will look for new export markets, according to Steve Young, managing director of British car retail consultancy ICDP.
“The intensity of the price war in China makes it even more important for them to find opportunities to sell significant volumes of product in markets where they have the most margin in terms of pricing,” Young said.
Europe is about to take the first hit from Chinese carmakers’ exports, particularly as the US Inflation Recovery Act contains provisions that could hamper sales in US markets.
Patrick Koller, CEO of French auto supplier Faurecia, believes Europe’s entry-level BEV market is ripe for China’s onslaught. He said China could sell 1 million electric cars a year of all types here, about 8% of the market last year.
“I think a car that is attractive to Chinese consumers will be an attractive car to a European consumer,” Reuters said in an article on the Shanghai show.
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