BYD’s EU Profit 10x Higher! EU Premium Unveiled.
What?
A recent report by Rhodium Group revealed that BYD is making a staggering profit of $15,400 on their Seal U model in Europe, compared to just $1,400 in China. This means BYD enjoys a $14,000 “EU premium” on each Seal U vehicle sold in the EU. The European Commission’s investigation also uncovered unfair subsidies for Chinese battery electric vehicles (BEVs), leading to provisional import duties ranging from 17.4% to 38.1%. Despite the new 30% tariffs, BYD would still profit over $5,000 per vehicle sold in the EU, making exports to Europe highly lucrative.
Why does it matter?
These findings shed light on the disparities between profits made by BYD in different markets, highlighting the impact of subsidies and import duties on the automotive industry. While higher tariffs could make exporting to Europe less attractive for Chinese companies, they might also disrupt the business models of Western automakers like BMW and Tesla, who rely on China for exports to Europe. The competitive landscape is evolving, with Chinese EV makers aiming to expand their market share in Europe despite potential duties.
How is it going to shape the future?
The growing price war in the EV market, coupled with tighter profit margins in China, is propelling Chinese manufacturers to explore export opportunities in Europe. Companies like BYD and SAIC-owned MG are eyeing the EU as a key export destination, driven by favorable market conditions and ambitious growth targets. As the industry dynamics shift and new challenges arise, players on both sides will need to adapt to a changing landscape marked by regulatory changes and evolving consumer preferences.