Why This Chinese EV Poses a Big Threat to the U.S. Auto Industry

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A tiny, low-priced electric car called the Seagull has American automakers and politicians trembling. Here's what to know.

A visitor is checking out the Chinese automaker BYD Seagull electric car on display at the 45th Bangkok International Motor Show 2024 in Nonthaburi Province, on the outskirts of Bangkok, Thailand, on March 30, 2024.

“Any car company that’s not paying attention to them as a competitor is going to be lost when they hit their market,” said Sam Fiorani, a vice president at AutoForecast Solutions near Philadelphia. “BYD’s entry into the U.S. market isn’t an if. It's a when.” Inside a huge garage near Detroit, a company called Caresoft Global tore apart and reassembled a bright green Seagull that its China office purchased and shipped to the U.S.

Higher U.S. labor costs are a part of the equation. BYD also can keep costs down because of its battery-making expertise — largely lithium iron phosphate chemistry used in consumer products. The batteries cost less but have lower range than most current lithium-ion batteries.BYD also makes many of its own parts, including electric motors, dashboards, and bodies, using its huge scale — 3 million vehicles sold worldwide last year — for cost savings.

So Detroit needs to quickly re-learn a lot of design and engineering to keep up while shedding practices from a century of building vehicles, Woychowski said.

 

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