24/7 Insights
- The largest electric vehicle maker in the world aims to expand widely, despite opposition.
- America’s two largest car companies are far from ready to compete.
BYD’s board chair, Wang Chuanfu, has built his company into the largest electric vehicle (EV) maker in the world. Almost all of its sales are in China, the world’s largest EV market by far. However, BYD has made its intentions clear. It wants to get into Europe and the United States. BYD has already started moving into developing countries, including Brazil, the world’s seventh-largest car market, and India, the world’s fourth-largest.
Can American Car Companies Compete?
Wang says the reason the European Union and United States are blocking his company’s cars is that their manufacturers want to avoid what could be massive EV competition. He recently said, according to Bloomberg, “There are many examples of politicians in other countries who are worried about EVs in China. If you are not strong enough, they will not be afraid of you.” It is his way of saying Western car companies cannot compete with his high-quality, low-priced EVs. U.S. tariffs of 100% on Chinese cars are evidence of that.
Wang is right. America’s two largest car companies, Ford Motor Co. (NYSE: F) and General Motors Co. (NYSE: GM), have sales that continue to be dominated by gasoline-powered vehicles. The percentage of their EV sales is growing but remains very modest. Each is years away from having large fleets of EVs that can be sold at attractive prices. A Ford Mustang Mach-E has a base price of $40,000. Some BYD vehicles sell for well under $20,000.
Wang may criticize the barriers erected to keep his cars out of the United States, but GM and Ford cannot afford to have sharp decreases in their sales due to Chinese competition.
A year ago, Ford Executive Chair Bill Ford told Reuters, “They developed very quickly, and they developed them in large scale. And now they’re exporting them. They’re not here but they’ll come here we think, at some point, we need to be ready, and we’re getting ready.” Ford isn’t ready yet.
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