YOKOHAMA, Japan (AP) – Osamu Furukawa has driven many Japanese cars for his business converting classic gasoline 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 which are beginning to compete with Western and Japanese brands in their home markets. They provide rapidly developing technology and low prices that the chief financial officer of Tesla Inc. he says it’s “scary”.
Furukawa said he ordered an ATTO 3 when it went on sale on Jan. 31, because of its easy-to-use features and attractive price of 4.4 million yen ($33,000), or about a quarter less than a Tesla.
“It’s perfect,” Furukawa said from 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, pushing 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 will go on sale this year in Europe. The ES6 features voice-activated controls and a range of 610 kilometers (380 miles) on a charge.
“We are very confident that the ES6 will compete in this premium SUV market,” NIO 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 nearly doubled last year to 6.9 million vehiclesor half of the overall total.
This 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. This rattles US and European leaders who see China as a strategic and industrial competitor.
Chinese brands are “serious competition,” according to GlobalData analyst David Leah.
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., beat Tesla in total sales in 2022 in 1.9 million vehicles. Half were gasoline-electric hybrids, while Tesla’s fleet is pure electric.
“We have a lot of respect for car companies in China,” Tesla CEO Elon Musk said on a Jan. 25 conference call with financial analysts. “Work the hardest and work the smartest.”
Chinese brands are developing electric vehicles to compete without subsidies as Beijing shifts the burden to the industry by requiring them to earn credits for selling electricity. Prices start at 100,000 yuan ($14,500) for a compact SUV with a range of 400 kilometers (250 miles) on a single charge.
“The Chinese are scary,” Zachary Kirkhorn, Tesla’s chief financial officer, said on the analyst call.
Chinese electric vehicle brands combine research and design centers in the United States and Europe with factories in China.
Geely’s Zeekr plans to launch an all-electric sedan and SUV this year in the Netherlands and Sweden. Its mini United Nations Chinese and European designers are located in Gothenburg, Sweden, next to Volvo Cars, another Geely brand, while its factories are in China.
“Our ambition is to be a key player in electrified mobility in Europe this decade,” said Zeekr CEO Spiros Fotinos, a Toyota and Lexus veteran. With a “clear global ambition,” he said, “we are looking at opportunities and the right timing for other markets.”
Carlos Tavares, CEO 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 be this way.”
BYD Auto’s exports quadrupled last year to 55,916 sedans, SUVs and sedans. Most went to India, Thailand, Brazil and other developing markets. BYD last year announced a sale of 1,000 vehicles to Mexico’s VEMO for the largest fleet of electric taxis outside of China.
Beijing-based state-owned BAIC said a Jordanian dealer ordered 1,000 units of its EU5 compact 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 largest and richest market?
Chinese electric vehicle brands are worried about a sprawling country that demands big investments in dealerships and charging networks, especially as Washington and Beijing tussle. on security, technology and human rights.
“This is not an easy task,” said NIO’s Li. “Our products and services must be ready.”
BYD Auto has been in the US market for a decade, selling battery-powered transit buses assembled at a factory in northeast Los Angeles. The company said 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.
Political tensions “make it difficult to launch a Chinese company, EV or not,” in the United States, Leah said.
In Europe, the Hour of the Great Wall sells its 03 model starting at 140,000 yuan ($20,000). Ora tries to stand out from dozens of fledgling brands by marketing its cars as designed for women, their body size and daily needs.
“This is a second or third car for a household. It can be used by a wife or a daughter to go to work, to go out with friends or to go shopping,” said Ora deputy general manager Tan Jian.
In Europe, BYD Auto has partnerships with dealer chains in the UK, Sweden, Germany and the Netherlands. The company says it has also delivered cars to Belgium, Denmark and Austria. It has a deal with European rental company SIXT that BYD says will lead to sales of up to 100,000 vehicles over the next six years.
In Japan, BYD Auto plans to have 100 showrooms by the end of 2025. Its Dolphin hatchback and Seal sedan will hit the Japanese market this year. The company says it has also exported about 4,000 ATTO 3s to Australia.
The OZ Co. de Furukawa converts Volkswagen Beetles and other classic models by replacing gasoline engines with batteries and electric motors. Furukawa said he drives his ATTO 3 every day and has gone as far as Osaka, 400 kilometers (250 miles).
BYD Auto’s Yokohama showroom, which opened on February 2, is surrounded by dealers of well-established brands such as Toyota, Nissan, BMW, Volkswagen and Chevrolet.
A married father of one said he looked at Japanese models but bought an ATTO 3 because of its spaciousness and price.
“I like the ride, and it’s easy to drive,” said the buyer, who asked to be identified only by his last name, Ohta. “There are so many good features.”
Ohta’s father had a “negative reaction” because BYD was from China, which has a history of strained relations with Japan. But Ohta said his work in the electronic game industry has taught him to respect Chinese innovation.
“They’re coming out with great products,” Ohta said. “I have respect for the nation.”
___
McDonald reported from Shanghai.
