LIVONIA, Mich. — A tiny, cheap electric car called the Seagull has made American automakers and politicians tremble.
The car, launched last year by Chinese automaker BYD, sells for around $12,000 in China, but it performs well and is built with a finish that rivals North American electric vehicles, which cost three times as much. . A shorter-range version costs less than $10,000.
Tariffs on imported Chinese vehicles will keep the Seagull out of America for now, and it will likely sell for more than $12,000 if it is imported.
See more information: The lesson from BYD’s electric vehicle acquisition: Don’t discount China
But the rapid emergence of low-priced electric vehicles from China could shake up the global auto industry in a way not seen since the arrival of Japanese manufacturers during the 1970s oil crisis. BYD, which stands for “Build Your Dreams,” could be a nightmare for the US auto industry.
“Any automaker that doesn’t pay attention to them as competitors will be lost when they come into their market,” said Sam Fiorani, vice president of AutoForecast Solutions, near Philadelphia. “BYD’s entry into the US market is not a hypothesis. It’s a while.
US politicians and manufacturers already view Chinese EVs as a serious threat. The Biden administration is expected on Tuesday announce 100% rates about electric vehicles imported from China, saying they pose a threat to U.S. jobs and national security.
The Alliance for American Manufacturing states in an article that government-subsidized Chinese EVs “could end up being an extinction event for the US auto sector.”
Earlier this year, Tesla CEO Elon Musk said that Chinese electric vehicles are so good that without trade barriers, “they will practically demolish most other car companies in the world.”
Outside of China, EVs are often expensive, aimed at higher-income buyers. But Chinese brands offer affordable options to the masses – just as many governments are encouraging the move away from gasoline vehicles to combat climate change.
Inside a huge garage near Detroit, a company called Caresoft Global disassembled and reassembled a bright green seagull that its China office purchased and shipped to the US.
Company President Terry Woychowski, a former chief engineer for General Motors pickup trucks, said the car is a “clarion call” for the U.S. industry, which is years behind China in designing low-cost electric vehicles. .
After the teardown, Woychowski said he was left wondering if American automakers could adjust. “Things will have to change in radical ways in order to compete,” he said.
There is no miracle that explains how BYD can manufacture the Seagull for so little. Instead, Woychowski said the entire car, which can travel 252 miles (405 kilometers) per charge, is “an exercise in efficiency.”
Higher labor costs in the US are part of the equation. BYD can also keep costs low due to its expertise in battery manufacturing – particularly in the lithium iron phosphate chemistry used in consumer products. The batteries cost less but have shorter range than most current lithium-ion batteries.
Americans are still learning how to make cheaper batteries, Woychowski said.
BYD also makes many of its own parts, including electric motors, dashboards and bodies, using its enormous scale – 3 million vehicles sold worldwide last year – to save costs.
It designs vehicles with cost and efficiency in mind, he said. For example, the Seagull has only one windshield wiper, eliminating a motor and an arm, saving weight, cost and labor for installation.
U.S. automakers don’t typically design vehicles this way and incur excessive engineering costs, Woychowski said.
Efficiency means weight savings that add up, allowing the Seagull to travel further per charge with a smaller battery.
So Detroit needs to quickly relearn a lot of design and engineering to keep pace while at the same time abandoning century-old practices of vehicle construction, Woychowski said.
The Seagull still has a quality feel. The doors close solidly. The gray synthetic leather seats have stitching that matches the body color, a feature normally found in more expensive cars. The Seagull tested by Caresoft has six airbags and electronic stability control.
A brief trip through some connected parking lots by a reporter showed that it runs quietly and handles curves and bumps as well as more expensive EVs.
While acceleration isn’t mind-blowing like other EVs, the Seagull is peppy and would have no problem merging onto a highway.
BYD would have to modify its cars to meet U.S. safety standards, which are more stringent than China’s. Woychowski says Caresoft didn’t do crash testing, but estimated it would add $2,000 to the cost.
BYD sells the Seagull, also called Dolphin Mini, in four Latin American countries for around US$21,000. The higher price includes shipping and reflects higher profits possible in less competitive markets than China.
BYD told the AP last year that it is “still in the process” of deciding whether to sell cars in the US. It is evaluating factories in Mexico for the Mexican market.
The company doesn’t sell cars in the U.S., largely due to 27.5% tariffs on the selling price of Chinese vehicles when they arrive. Donald Trump imposed the bulk of the tariff, 25%, when he was president, and it was left in place under Joe Biden. Trump claims the surge in Biden-backed EVs will cost U.S. factory jobs, sending work to China.
The Biden administration has supported legislation and policies to build an electric vehicle production base in the US.
Some members of Congress are urging Biden to ban imports of Chinese vehicles entirely, including those made in Mexico by Chinese companies that would now enter largely tariff-free.
Ford CEO Jim Farley saw Caresoft’s work on the Seagull and BYD’s rapid growth, especially in Europe. He is moving to change companies. A small “skunkworks” team is designing a new, small EV to keep costs low and quality high, he said earlier this year.
Chinese manufacturers, Farley said, sold almost no electric vehicles in Europe two years ago, but now hold 10% of the electric vehicle market. They are likely to export around the world and possibly sell in the US
Ford is preparing to combat this. “Don’t take anything for granted,” Farley said. “Not this CEO.”
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Associated Press writers Paul Wiseman and Didi Tang in Washington contributed to this report. Moritsugu reported from Beijing.
This story originally appeared on Time.com read the full story
