Most of the world is worried, yes China by lowering prices of its electric vehicles is flooding international markets. However, a new report says many do rather the opposite. Instead, he notes that Chinese automakers are significantly increasing the prices of their exported vehicles in order to increase in profits abroad.
This strategy is supported by the company BYD, which faces increasing competition in the domestic market. Several Chinese automakers are currently involved in the price war for electric vehicles on the domestic market, thanks to which the local government subsidizes the introduction of electric vehicles for foreign and domestic brands. This naturally reduces profits.
BYD he therefore wishes to maximize the profit of his models abroad. In some cases, the company sells its models at almost three times the price, like the price on the domestic market. However, in many cases, Chinese supply still manages to beat Western competition.
Research shows that Chinese automakers they set vehicle prices just below the prices of European brands. At the same time, they offer more standard equipment and technologies, often more expensive than traditional manufacturers.
Taking into account additional costs such as transportation, these margins indicate thundreds of dollars in additional profit to an electric vehicle. Indeed, Chinese manufacturers have rationalized costs at all stages of the production process, from battery production to raw material extraction.
According to company estimates Reference mineral intelligence, engaged in market research, the cost of batteries in China is 18 percent less than elsewhere. The company as it is BYDwhich makes its own batteries, can negotiate additional discounts throughout the supply chain, and Chinese automakers are also helped by availability state-subsidized land and cheaper energy and labor costsas the old European manufacturers did.
According to the agency Reuters it was the price of the model BYD Act 3 in some export markets, 81 to 174% higher than in China. Prices for Dolphins were 39 to 178 percent higher – in Germany the price of the model was BYD Dolphin 37.439 USD, while the comparable model costs only 16.524 USD in China. Model prices BYD seal were higher by 30% to 136%. Compare that to Tesla, where a Model 3 made in China sells for just 37% more in Germany than in China.
Many European automakers will likely be wondering which one maneuvering space Chinese automakers have done so, which could allow them to lower prices and engage in their own sales war. It also means that China’s major automakers could likely survive EU tariffs on imported vehicles.
