SHANGHAI (Reuters) - Elon Musk has said the only thing holding back electric vehicle (EV) sales is their price.
Companies like BYD are solving that problem in China – and getting ready to solve it for the world.
China's largest EV maker unveiled this week the Seagull at the Shanghai auto show, shocking analysts and rivals with the car's specs: a battery range of more than 300 kilometers (186 miles) and a starting price of just over $11,000 – about a quarter of the price of most EVs now on the market in Europe.
"The Seagull is another manifestation of the aggressive deflationary pressures coming from (Chinese) automakers," Morgan Stanley analyst Adam Jonas said in a note for investors, predicting a "more aggressive push" from Chinese companies to sell entry-level EVs outside China.
Musk's Tesla cut prices in the U.S. for the sixth time since the start of the year on Tuesday, looking to drive demand in the face of economic uncertainty and growing competition. Tesla's price cuts have prompted other automakers, including in China, to follow suit.
But the Shanghai show and the Seagull highlight a related dynamic: Chinese automakers are now leading the world in making EVs that compete on price and technology for the average budget.
And many more of those cars from BYD and its rivals will be headed to Europe, Southeast Asia and other overseas markets, threatening established automakers, executives and analysts said.
Patrick Koller, chief executive of French auto supplier Faurecia, said the entry-level EV market in Europe was an open lane for Chinese automakers.
“I think an attractive car for Chinese consumers will be an attractive car for a European consumer,” he told Reuters.
Koller said he had met with the CEO or chairman of more than two dozen Chinese automakers in Shanghai. Many are looking to export to Europe, he said.
Because of their "fantastic competitive advantage," Koller predicted Chinese automakers could look to sell one million cars per year in Europe, equivalent to 8% of the market last year.
Companies like BYD are solving that problem in China – and getting ready to solve it for the world.
China's largest EV maker unveiled this week the Seagull at the Shanghai auto show, shocking analysts and rivals with the car's specs: a battery range of more than 300 kilometers (186 miles) and a starting price of just over $11,000 – about a quarter of the price of most EVs now on the market in Europe.
"The Seagull is another manifestation of the aggressive deflationary pressures coming from (Chinese) automakers," Morgan Stanley analyst Adam Jonas said in a note for investors, predicting a "more aggressive push" from Chinese companies to sell entry-level EVs outside China.
Musk's Tesla cut prices in the U.S. for the sixth time since the start of the year on Tuesday, looking to drive demand in the face of economic uncertainty and growing competition. Tesla's price cuts have prompted other automakers, including in China, to follow suit.
But the Shanghai show and the Seagull highlight a related dynamic: Chinese automakers are now leading the world in making EVs that compete on price and technology for the average budget.
And many more of those cars from BYD and its rivals will be headed to Europe, Southeast Asia and other overseas markets, threatening established automakers, executives and analysts said.
Patrick Koller, chief executive of French auto supplier Faurecia, said the entry-level EV market in Europe was an open lane for Chinese automakers.
“I think an attractive car for Chinese consumers will be an attractive car for a European consumer,” he told Reuters.
Koller said he had met with the CEO or chairman of more than two dozen Chinese automakers in Shanghai. Many are looking to export to Europe, he said.
Because of their "fantastic competitive advantage," Koller predicted Chinese automakers could look to sell one million cars per year in Europe, equivalent to 8% of the market last year.
