BYD is a Chinese company that sold more than three million cars last year and announced the construction of a large factory in Hungary. BYD wants to sell many hundreds of thousands of cars a year in the EU, but it has managed to deliver only 15,000 in 2023. BYD has money and ambition, is present in eight major European markets, but has not decided which “path” to take.

BYD is big in China but small in Europe

BYD, Geely, MG, Great Wall and some other names are among the Chinese companies that want to have an important share in the European car market.

BYD has been touted as the “Tesla killer” because it’s a company that has grown so much in China that the only way to keep growing volume is to quickly enter many foreign markets, especially Europe.

• China’s BYD announces the construction of a large electric vehicle plant in the city of Szeged, Hungary

BYD entered the Norwegian market at the end of 2021 and is currently present in eight major markets with five models and prices ranging from €30,000 to over €70,000. In recent days, there has been talk about the launch of an electric SUV in Europe, which will cost more than 100,000 euros.

Recently, BYD brought about 5,000 cars in one ship to a port in the Netherlands and Germany, but in 2023, the total sales volume in the EU was not very high: about 15,000 units, of which 80% was the Atto 3 model, which it costs. 38,000 euros

BYD wants to sell more and more, plans to release new models, but has not defined a strategy. It has not yet been decided whether sub-brands will also be launched or if it will only be under the BYD name. Compared to other Chinese brands, BYD has only “marched” to electric in Europe, but it will also introduce a hybrid, and in the future we will not be surprised if they enter saloons and gasoline models (but not many).

It is clear that BYD must also focus on cheaper models in Europe, and the start is a car called Dolphin, which costs 30,000 euros and has an autonomy of 250 km “on paper”. Even with more affordable models — and with entry into new markets — it’s clear that BYD won’t be able to grow quickly in Europe and reach a total of 100,000 vehicles in 2024 or the year after.

In China, the BYD group has four brands, and one of them, called Denza, has a high chance of entering the German market at the end of 2024 or in 2025.

Prices are falling, but new barriers are emerging

Chinese brands have cars at increasingly better prices, but European countries are starting to crack down on them because the idea is that these cars are made in China at unrealistically low prices thanks to the heavy subsidies the Chinese government gives to car suppliers and manufacturers.

The vast majority of EV batteries are made in China, more manufacturers will open factories in Europe, but China will undoubtedly remain #1 in battery production.

• The long way of the Chinese, who are about to overtake Tesla in electric cars – From a guest from a battery to car showrooms in Europe

The Chinese still have low sales in the European market, and because many EU customers remain loyal to European car brands, and when they decide to buy a new car, they tend to choose the brands they are used to. But even when they buy a European brand, it happens that they buy a car made in China, the most famous example of which is the Dacia Spring.

BYD has announced that it will make a significant investment in a car factory in Hungary, which means that in a few years it will also produce in the EU and thus avoid paying high customs tariffs.

The problem is that a Chinese carmaker producing more and more cars in the EU will have higher costs, especially with wages, so profit margins could be seriously affected if EU production reaches a constant share.

European customers should trust these Chinese brands that many people in the EU are hearing about for the first time. First impressions are positive, Chinese cars look good, have a lot of technology and good prices.

We will hear about Chinese cars not only from Geely (owned by Volvo), BYD, Great Wall and MG. There are other brands also present in Romania that hope to sell well: DFSK, Seres, BAIC, FAW – Bestune, JAC or Brilliance

However, there is reluctance towards Chinese brands, and the attitude of EU states towards these products from China will be of great importance here, as many states want to protect their car industry (and jobs) in the face of the Chinese “attack”.

BYD’s share price has fallen by 16% in the past year, there is no longer a mood of super-optimism, but there is also no pessimism, because the European electricity market has exceeded two million units in 2023, which is an unprecedented level.

Sources: Automotive News, Bloomberg, Fortune, New York Times