A BYD Ship Full of Electric Cars Has Docked in Germany: Is There Hope for European Manufacturers

Earlier this month, a large ship picked up more than 5,000 electric cars from two ports in northern and southern China. Five days later, it passed through Singapore and headed towards India. The ship, 2.5 times longer than a football field and filled with electric cars produced in China, was forced to divert around the Cape of Good Hope to avoid the Red Sea, adding 10 days to its journey, which ultimately aimed for the German port of Bremerhaven, where it arrived last Sunday. This first voyage of the BYD Explorer No.1 , whose name itself indicates it comes from the fleet of the Chinese electric vehicle manufacturer BYD, marks a new chapter in the ambitions of the Chinese manufacturer, which is slowly but surely opening up the European market.

– Demand is rising and searches for our company on Google have surpassed Tesla, and we believe we will achieve a lot in the European market – proudly stated Michael Shu, director of BYD Europe.

But manufacturers from the Union are determined to strike back. Just a few hours after the BYD ship docked, Renault’s CEO Luca de Meo took advantage of the Geneva Motor Show to present a series of cars that he believes will help the French manufacturer stay competitive against Asian rivals. This includes the electric Renault 5, priced at just 25,000 euros, which will pave the way for even cheaper models, as well as the Dacia Spring, the first electric car from the group’s budget brand. The Dacia Spring, which is produced in China, will have a starting price of less than 20,000 euros, the company said, with some reports indicating it will cost around 15,000 pounds in the UK, which is just over 17,000 euros.

– We have also started talks with Volkswagen about collaborating on a cheap EV project – said De Meo at the Geneva show.

Meanwhile, Renault’s biggest rival Stellantis, which owns brands including Peugeot and Fiat, hopes to offer an electric model in Europe that would cost less than 20,000 euros, according to the head of European operations Uwe Hochgeschurtz, who says such a car can be produced, but it all depends on what is in the car, what battery it has, what the range is…

Small and Cheap

The fight for the cheap segment of the electric vehicle market is crucial. Small cars are the best-selling in Europe, but several manufacturers have discontinued them as rising costs to meet emissions regulations have made their production unprofitable at an affordable price.

Renault’s De Meo claims that ‘everyone has pulled out of the market for small internal combustion engine cars because no one can produce them profitably.

– Polo is out, Fiesta is out, everyone is out – says De Meo.

The Renault 5 is the company’s first cheaper electric vehicle, but Renault plans to reduce costs by up to 40 percent in subsequent versions later this decade. And while the Dacia Spring will be imported from China, Renault’s own brand models will be produced domestically.

– What was very challenging for the team is that I decided to make it in France – said De Meo, claiming that everyone told him he was totally crazy.

However, since electric vehicles have fewer parts than internal combustion engine cars, fewer workers are needed, and the impact of high wages in France would be less, he said, adding that about 80 percent of the supply chain would be within 300 km, thus reducing logistics costs.

But at this moment, the Dacia company is leading the pack. When designing cheaper models, Dacia often starts with a Renault vehicle and removes everything that is not considered essential.

– We have nothing superfluous in it. We don’t have 22 screens, we don’t have electric seats, but this approach is resonating more and more, as some people say: don’t spend money on useless things. We also don’t put chrome on the car. Why? Because it’s shiny and useless – said Denis le Vot, CEO of the Dacia brand.

A Year of Sales

At the Geneva Motor Show, right across from the Renault and Dacia displays, is BYD’s stand with a range of models from the Chinese manufacturer whose prices are similar to or lower than those of leading European manufacturers. They are looking each other in the eye, and every single one dreams of victory in the electric market.

Although BYD only started selling in the EU a year ago, they have already made a serious breakthrough in the market, and with their own shipping fleet, this breakthrough will only become more pronounced.

The BYD Seal, a large sedan priced at around 52,000 euros, is already selling better than the equivalent Tesla Model 3 in some markets such as Ireland and Austria, said Michael Shu.

But the company is also carefully monitoring other markets.

– Many customers or partners are looking for a smaller car, as Europeans prefer smaller vehicles – said Shu, who added that ‘a new model is coming, priced below 30,000 euros as early as next year.

Getting below 20,000 euros is more difficult, he added, due to regulations, especially regarding crash safety. The company hopes that BYD’s new Explorer model will help in this regard as well.

BYD’s ship, which was launched in China amid fireworks and dragon dances, is designed to be as cost-effective as possible. As the company states, even the color on the hull of the ship is special as it reduces water resistance, saving fuel, and is particularly important for the announcement and expansion of BYD’s shipping fleet.

While they strive to reduce costs, European car manufacturers feel that they are not sufficiently supported by governments, whose decarbonization policies have forced them to develop battery vehicles in which China is leading.

– The European industrial strategy is completely lacking. Politicians need to listen to us; we are the people investing money and risking investments – said De Meo, who also leads the European automobile manufacturers’ association, ACEA.

Although the European Commission has launched an investigation into cheap Chinese imports that could lead to higher tariffs on cars coming from China, European manufacturers believe that this may not be enough to protect them from cheap imports.

According to Hochgeschurtz, the Chinese ‘can lower prices much lower than you think, even in the wildest dreams.’ Many brands sell similar electric vehicles in China for about half the price they advertise in Europe, he added. They can absorb higher tariffs, lower prices, and still make high profits, concluded Hochgeschurtz.