Livonia, Michigan —The Seagull, a small, low-cost electric automobile, has American automakers and politicians concerned.
The vehicle, which Chinese automaker BYD unveiled last year, costs about $12,000 in China, but it drives smoothly and has a level of craftsmanship that is comparable to three times more expensive electric vehicles made in the United States. A shorter-range version costs less than $10,000.
Tariffs on imported Chinese vehicles are expected to keep the Seagull away from American shores for the time being, and if imported, it will most certainly cost more than $12,000.
Small, Well-Built Chinese EV Called The Seagull Poses A Big Threat To The US Auto Industry
However, the quick introduction of low-cost EVs from China has the potential to shake up the global auto industry in ways not seen since Japanese manufacturers erupted onto the scene during the 1970s oil crisis. BYD, which stands for “Build Your Dreams,” could be disastrous for the US auto industry.
“Any car company that isn’t paying attention to them as a competitor will be lost when they enter their market,” said Sam Fiorani, vice president of AutoForecast Solutions near Philadelphia. “BYD’s entry into the US market is not a question. “It’s a when.”
Politicians and businesses in the United States already perceive Chinese EVs as a potential threat. On Tuesday, the Biden administration will likely impose 100% tariffs on imported electric vehicles from China, citing a threat to American jobs and security.
According to a study by the Alliance for American Manufacturing, government subsidies for Chinese electric vehicles “could end up being an extinction-level event for the U.S. auto sector.”
Earlier this year, Tesla CEO Elon Musk warned industry analysts that Chinese EVs are so good that, without trade obstacles, “they will pretty much demolish most other car companies in the world.”
Outside China, EVs are often expensive, catering to a higher-income niche market. However, Chinese businesses that still need to be worldwide household names are providing affordable solutions that appeal to the masses, just as the United States, Europe, and many other nations are pushing a shift away from gasoline-powered vehicles to combat climate change.
“The Western markets have not democratized EVs. “They gentrified EVs,” said Bill Russo, founder of Shanghai-based consultancy Automobility Ltd. “And gentrification limits the market size. China is all about democratizing electric vehicles, ultimately leading Chinese companies to success as they expand globally.”Inside a massive garage in an industrial location west of Detroit, Caresoft Global disassembled and reassembled a bright green Seagull purchased in China and delivered to the United States.
Company President Terry Woychowski, a former chief engineer on General Motors’ large pickup trucks, described the car as a “clarion call” for the United States auto industry, years behind China in developing low-cost EVs.
Following the breakdown, Woychowski, who has been in the car industry for 45 years, expressed concern about whether American automakers can adapt. “Things will have to change in some radical ways in order to be able to compete,” he stated.
There is no single miracle that explains how BYD can produce the Seagull so cheaply. Instead, Woychowski described the complete vehicle, which can travel 252 miles (405 kilometers) on each charge, as “an exercise in efficiency.”
Higher labor costs in the United States are one factor to consider. BYD can keep costs down due to its competence in manufacturing lithium iron phosphate batteries, which are primarily used in consumer products. They are less expensive but have a shorter range than most modern lithium-ion batteries.
Woychowski explained that Americans are still discovering how to build cheaper batteries. Ford is constructing a lithium iron phosphate battery facility using technology from China’s CATL.
BYD manufactures several parts, such as electric motors, dashboards, bodywork, and headlights. It also has the advantage of massive size, with 3 million vehicles sold worldwide last year.
“By having that all in-house and vertically integrated, there’s an incredible advantage that they have,” Woychowski stated.
BYD designs all of its cars with cost and efficiency in mind. For example, the Seagull has only one windshield wiper, eliminating one motor and one arm, saving weight, money, and labor during installation.
According to Woychowski, automakers in the United States rarely design automobiles in this manner, resulting in higher engineering expenses. Hoses, for example, must meet long-standing combustion engine standards for strength and the capacity to convey fluid under high pressure, many of which are unnecessary in electric vehicles.
Small, Well-Built Chinese EV Called The Seagull Poses A Big Threat To The US Auto Industry
The weight reductions accumulate, allowing the Seagull to travel further per charge with a smaller battery. For example, the Seagull that Caresoft tested weighs 2,734 pounds (1,240 kilograms), around 900 pounds less than a Chevrolet Bolt, GM’s slightly larger electric vehicle.
To stay up, Detroit must swiftly re-learn a lot of design and engineering while discarding traditions developed over a century of vehicle production. He said the problem will be deciding which procedures to preserve for safety and quality and which to eliminate because they are unnecessary.
“You’re going to have to come and be extremely serious about this, and you better park your paradigms at the door,” Woychowski stated. “Because you’re going to have to do things differently.”
Despite its simple form, the Seagull exudes quality. The doors close solidly. The gray synthetic leather seats include stitching that matches the body color, a characteristic often found in more costly vehicles. The Seagull “Flying Edition” reviewed by Caresoft includes six airbags, rear disc brakes, and electronic stability control.
A reporter’s brief drive around connected parking lots revealed that it runs quietly and can manage bends and bumps like more expensive electric vehicles.
While the acceleration isn’t as impressive as other EVs, the Seagull is quick and would easily enter a freeway in heavy traffic. Woychowski claims the top speed is limited to 81 mph (130 km/h).
BYD would have to adapt its vehicles to meet US safety regulations, which are more strict than those in China. Woychowski says Caresoft still needs to do crash tests, but he estimates that doing so would cost $2,000 more for the Seagull.
BYD sells the Seagull, renamed the Dolphin Mini in some overseas markets, for almost $21,000 in four Latin American nations, more than twice the price here. The greater price includes transportation costs but also reflects the potential for bigger profits in less competitive markets than China.
In Europe, BYD sells larger models like the Seal, which starts at 46,990 euros ($50,000) in France. According to the China Passenger Car Association, the Chinese manufacturer’s top two overseas markets in the first two months of this year were Thailand and Brazil.
BYD manufactures electric buses in California and told the Associated Press last year that it is “still in the process” of determining whether to sell automobiles in the United States. Two firm executives stated in media interviews earlier this year that it is considering sites for production in Mexico, but only for the Mexican market.
Small, Well-Built Chinese EV Called The Seagull Poses A Big Threat To The US Auto Industry
The company does not sell cars in the United States, owing mostly to 27.5% tariffs on Chinese vehicle sales when they arrive at ports. When Donald Trump was president, he imposed the majority of the tariff, 25%, which remained in place under Joe Biden. Trump claims that Biden’s push for electric vehicles will kill American manufacturing jobs, transferring the work to China.
The Biden administration has supported legislation and policies to establish a US EV manufacturing base, and it has not ruled out additional tariffs to keep the Chinese out. The administration is also looking into cars built in China that could collect sensitive information.
Some members of Congress are asking Biden to prohibit imports of Chinese vehicles, while others have proposed even higher duties. This includes vehicles manufactured in Mexico by Chinese businesses, which would now be imported essentially tariff-free.
Ford CEO Jim Farley has seen Caresoft’s work on the Seagull and seen BYD’s quick growth worldwide, particularly in Europe, where he previously ran Ford’s business. He’s planning to change his company. He told analysts earlier this year that a small “skunkworks” team is developing a new, small EV from the bottom up to keep prices low and quality high.
According to Farley, Chinese manufacturers sold essentially no EVs in Europe two years ago but now account for 10% of the electric vehicle industry. They may export around the world and possibly sell in the United States.
SOURCE – (AP)
