YOKOHAMA, Japan (AP) — Osamu Furukawa has driven many Japanese cars for his business, converting classic gasoline-powered models to electric. But his favorite car is an import: a battery-powered SUV from China’s BYD Auto.
BYD Auto is part of a wave of Chinese electric car exporters that are beginning to compete in their home markets with Western and Japanese brands. They bring fast-moving technology and low prices that Tesla Inc.’s chief financial officer says “are scary.”
Furukawa said he ordered an ATTO 3 when it went on sale Jan. 31 because of its user-friendly features and attractive price tag of 4.4 million yen ($33,000) — or about a quarter less than a Tesla .
“It’s perfect,” Furukawa said from his office in Yokohama, southwest of Tokyo.
Other ambitious Chinese EV exporters include NIO, Geely Group’s Zeekr and Ora, a unit of SUV maker Great Wall Motors.
Some compete on price. Others emphasize performance and features, putting pressure on premium Western and Japanese brands.
NIO Inc., which has persuaded buyers in China to pay Tesla-level sticker prices of up to 555,000 yuan ($80,000), says its latest SUV will go on sale in Europe this year. The ES6 features voice-activated controls and a range of 610 kilometers (380 miles) on one charge.
“We are very confident that the ES6 will compete in this premium SUV market,” said William Li, founder and CEO of NIO, in an interview at the Shanghai Auto Show.
Sales of battery-powered vehicles and gasoline-electric hybrids in China nearly doubled last year to 6.9 million vehicles, or half of global sales.
This has been helped by multibillion-dollar subsidies from the ruling Communist Party, which is trying to turn China into a creator of clean energy and other technologies. This unsettles US and European leaders, who view China as a strategic and industrial competitor.
According to GlobalData analyst David Leah, Chinese brands are “serious competition”.
They have “more competitive battery technology” and can “achieve greater economies of scale,” Leah said in an email.
BYD Auto, owned by battery maker BYD Co., overtook Tesla in 2022 with 1.9 million vehicles. Half were gasoline-electric hybrids, while Tesla’s fleet is all-electric.
“We have great respect for the auto companies in China,” Tesla CEO Elon Musk said in a conference call with financial analysts Jan. 25. “They work the hardest and they work the smartest.”
Chinese brands are developing EVs to compete without subsidies as Beijing shifts the burden to industry by requiring them to earn credit to sell EVs. Prices start at 100,000 yuan ($14,500) for a compact SUV with a range of 400 kilometers (250 miles) on a single charge.
“The Chinese are scary,” Tesla chief financial officer Zachary Kirkhorn said at the analyst call.
Chinese EV brands combine research and design centers in the United States and Europe with factories in China.
Geely’s Zeekr plans to launch an all-electric sedan and SUV in the Netherlands and Sweden this year. Its mini United Nations of Chinese and European designers is in Gothenburg, Sweden alongside Volvo Cars, another Geely brand, while its factories are in China.
“Our goal is to be a major player in electrified mobility in Europe within this decade,” said Spiros Fotinos, CEO of Zeekr, a Toyota and Lexus veteran. With a “clear global ambition,” he said, “we are exploring the possibilities and timing for other markets.”
CEO Carlos Tavares of Stellantis, the parent company of Chrysler, Peugeot and FIAT, warned in January that Europe needed a strategy to compete with China’s lower prices. Electronics made in Europe cost 40% more than Chinese models, according to Tavares.
“It’s a very bleak scenario,” Tavares told German magazine Automobilwoche. “But it doesn’t have to be that way.”
BYD Auto’s exports quadrupled last year to 55,916 sedans, SUVs and hatchbacks. Most went to India, Thailand, Brazil and other developing markets. BYD last year announced a sale of 1,000 vehicles to Mexican company VEMO for the largest EV taxi fleet outside of China.
State-owned BAIC, headquartered in Beijing, said a dealer in Jordan ordered 1,000 units of its compact EU5 sedan in January. The company plans to launch two to three more electric vehicles in Latin America, Southeast Asia and Europe.
What about the United States, the largest and richest market?
Chinese EV brands are wary of a sprawling country that demands large investments in dealerships and charging networks, especially as Washington and Beijing clash over safety, technology and human rights.
“It’s not an easy task,” said NIO’s Li. “Our products and services need to be prepared.”
BYD Auto has been in the US market for a decade, selling battery-powered transit buses that are assembled at a factory northeast of Los Angeles. It is “still in the process of deciding” whether to sell SUVs and sedans to Americans, the company said in a written response to questions.
Political tensions “make it difficult for a Chinese company to launch electric vehicles or other products in the United States,” Leah said.
In Europe, Great Wall’s Ora sells its Model 03 from 140,000 yuan ($20,000). Ora tries to stand out from dozens of young brands by marketing its cars as designed for women, their height and their everyday needs.
“It’s a second or third car for a household. It can be used by a wife or daughter to commute to work, go out with friends or go shopping,” Ora Deputy General Manager Tan Jian said.
In Europe, BYD Auto has partnerships with dealership chains in Great Britain, Sweden, Germany and the Netherlands. The company says it has also delivered cars in Belgium, Denmark and Austria. It has a deal with European rental company SIXT, which BYD says will result in sales of up to 100,000 vehicles over the next six years.
In Japan, BYD Auto plans to have 100 showrooms by the end of 2025. The Dolphin hatchback and Seal sedan are slated to hit the Japanese market this year. The company says it has also exported around 4,000 ATTO 3s to Australia.
Furukawa’s OZ Co. rebuilds Volkswagen Beetles and other classic models by replacing gasoline engines with batteries and electric motors. Furukawa said he drives his ATTO 3 every day and has driven all the way to Osaka, 400 kilometers away.
BYD Auto’s showroom in Yokohama, which opened on February 2, is surrounded by dealerships for established brands such as Toyota, Nissan, BMW, Volkswagen and Chevrolet.
A married father of one said he looked at Japanese models but bought an ATTO 3 because of its spaciousness and price.
“I like the ride and it’s easy to drive,” said the buyer, who asked to be identified by just his last name, Ohta. “There are so many good qualities.”
Ohta’s father reacted “negatively” to the fact that BYD hails from China, which has a long history of strained relations with Japan. But Ohta said his job in the electronic games industry taught him to respect Chinese innovation.
“They put out great products,” Ohta said. “I have respect for the nation.”
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McDonald reported from Shanghai.