China’s BYD recently surpassed Tesla as the global leader in electric vehicle (EV) sales, surprising many due to BYD’s ability to offer low prices. Michael Dunne, CEO of Dunne Insights, emphasized, “No one can match BYD on price. Period.” BYD’s ownership of the entire EV battery supply chain, from raw materials to finished battery packs, allows it to maintain low costs, a critical factor given that the battery comprises about 40% of an EV’s price.
While BYD cars are not prevalent in the U.S. due to tariffs, experts believe it’s only a matter of time. Even with a 25% tariff on Chinese-made EVs in the U.S., BYD’s competitive advantage on pricing is significant. Dunne noted that if BYD or other Chinese automakers introduce a $20,000 car, they would still be well-positioned, considering the average new car price in the U.S. is around $48,000.
BYD launched the Seagull EV in China at a competitive price of $11,000, becoming one of the bestsellers. The company plans to export more affordable models globally, including Europe, South America, and Southeast Asia, where it could be a disruptive force. BYD’s Dolphin hatchback in Britain starts at $33,000, nearly 30% below the starting price of Volkswagen’s ID.3 hatchback.
BYD’s potential entry into the U.S. might occur through Mexico, where the company is exploring locations for a manufacturing plant. With a free trade agreement with the U.S. and Canada, Mexico offers a strategic entry point. Bill Ford Jr., Ford Motor’s executive chairman, warned that American automakers are not fully prepared to compete with Chinese rivals in the EV market.
BYD’s founder and CEO, Wang Chuanfu, known for being a relentless cost-cutter, has been praised by Charlie Munger, Warren Buffett’s long-time partner. Munger stated that Wang possesses a unique ability to observe a part in the morning and produce it in the afternoon, describing him as “better at actually making things than Elon is.”
