A BYD costs 25% less to produce than a European one!

BYD, a declared rival of Tesla, is said to have production costs 25% lower than European automakers.

According to a recent UBS study, BYD and Tesla together are expected to increase their vehicle sales in Europe by 2.5 million units per year on a total market currently at 15 million cars. The bank doubts that the market can grow sufficiently to accommodate such ambitions and highlights BYD’s ideal position due to its contained manufacturing costs.

The results demonstrate the growing competitiveness of Chinese automakers, led by BYD, in manufacturing automotive systems with internally produced components and self-managed supply chains. An independence that Europeans lack severely. This could help Chinese brands maintain their cost competitiveness even as they shift from export to local production in some of the most developed markets in the world.

In the Chinese market, a new UBS study shows that the BYD Seal, the model closest to the Tesla Model 3, is 15% more profitable than its American rival produced locally in Shanghai.

This percentage would increase to 35% compared to Volkswagen models manufactured in Europe. This means BYD would spend $10,500 less to produce each Seal in China than a Volkswagen ID.3 in Europe!

For Chinese electric vehicles, exporting from China to Europe remains, of course, cheaper than local manufacturing. Despite this, Chinese electric vehicle manufacturers would still hold a 25% advantage over their rivals if they produced in Europe. How is this possible? 75% of auto parts, from batteries to semiconductors, are manufactured in-house by BYD!

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