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How BYD wants to conquer Europe's market for electric cars

It is a declaration of war to conquer the European market: BYD, the Chinese world market leader, is now sending its electric cars directly to Germany with its own freighter. The industry is hoping for help from Brussels.

Bremerhaven is experiencing a premiere: The maiden voyage of the “BYD Explorer 1”, the first car transport ship built for the Chinese car manufacturer BYD, has reached its destination. Around 3,000 electric cars are currently being unloaded.

The almost 200 meter long freighter had previously delivered 1,500 vehicles to Vlissingen in the Netherlands. In the future, Bremerhaven, as one of the largest car ports in the world, will become an important hub for BYD on the European market. So far the numbers are still manageable. Last year, fewer than 4,000 BYD electric cars were newly registered in Germany. But the Shenzhen company's ambitions are enormous.

Rapid rise

Founded in 1995 as a pure battery provider, BYD (“Build Your Dreams”) has been building its own cars since 2003. The in-house battery know-how is often cited as a success factor. BYD also supplies many western car companies, including BMW, Mercedes, Audi, Tesla, Toyota and Ford.

But even more impressive is the rapid rise of the car business. Since 2022, BYD's car division has said goodbye to combustion engines and specialized in pure electric cars and plug-in hybrids. And in the fourth quarter of 2023, BYD reached the top of the world with over 526,000 vehicles sold.

Sales in Germany should be multiplied

It has long been apparent that the Chinese are working on conquering the European electric car market. Most recently, only around eight percent of electric cars in Europe came from China. But there are now increasing signs of how serious the Chinese market leader really is. BYD rented the largest exhibition stand at the recent IAA automobile trade fair in Munich. “After just eleven months, we are already represented in 15 European countries,” Europe boss Michael Shu announced there.

After Volkswagen had to give up its market leadership in China's largest electric car market to BYD last year, another symbolic changing of the guard points to new realities. At this year's 2024 European Football Championship in Germany, the official advertising partner is no longer Volkswagen, but BYD.

100 car dealerships planned in Germany

At the same time, the group is significantly expanding its presence in Germany. BYD already has car dealerships in most large cities, with a goal of around 100 stores. In the future, 90 percent of Germans should be able to reach a BYD store in less than 30 minutes by car, according to the company. The Chinese's declared goal is to be among the top five in Germany and Europe. The company's first factory in Hungary is already planned for this purpose. BYD wants to sell 120,000 electric cars in Germany by 2026.

BYD currently offers five models in Europe, and three more are scheduled to come onto the market this year. With the BYD Seal, which costs around 45,000 euros in Germany, the company is directly attacking Tesla's best-seller Model 3.

The industry is looking to Brussels

BYD sold more than three million cars worldwide last year. Of these, 1.6 million were purely electric cars. In this category, i.e. without plug-in hybrids, Tesla was still ahead with 1.8 million in 2023.

But despite Tesla's continued ambitious growth goals, industry observers believe it is only a matter of time before the Chinese overtake the American market leader in sales of pure electric models. Tesla boss Elon Musk recently warned clearly about the triumph of competitors from the Far East. He not only discussed their well-known lower manufacturing costs. “They are extremely good,” explained the tech billionaire. If there were no trade barriers, they would “pretty much destroy most other car companies in the world,” according to Musk's gloomy forecast.

Even if German car manufacturers are rarely so clear, it is obvious that the industry is looking more and more longingly to Brussels. While an import tariff of 25 percent in the USA is still keeping Chinese suppliers out of the market, new protective mechanisms are also emerging in Europe.

The EU Commission has long accused China of using unfair subsidies to keep prices for electric cars on the European market artificially low and thus distorting competition. It has therefore launched an investigation into the extent to which international trade rules are being violated and European manufacturers are being disadvantaged. If necessary, Brussels wants to respond with punitive tariffs.

With material from Eva Lamby-Schmitt, ARD Studio Shanghai.

Eva Lamby-Schmitt, ARD Shanghai, tagesschau, February 15, 2024 4:57 a.m

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