Why BYD's EV exports sell for twice the China price

LONDON — U.S. and European politicians have raised alarms that their domestic auto industries could be destroyed by a wave of cheap Chinese electric vehicles. But so far, China's top EV maker, BYD, has dramatically hiked export prices compared to what it charges at home rather than undercut foreign rivals.

The goal: to rake in hefty profit margins the automaker can’t get in China amid fierce competition.

In some foreign showrooms, BYD charges more than double — sometimes nearly triple — the price it gets for three key models in China, according to a Reuters review of the automaker’s pricing in five of its biggest export markets.

Take the BYD Atto 3, a compact electric crossover. In China, the midrange version sells for $19,283. In Germany, the little SUV is priced at $42,789 — a price that's still competitive with comparable electric vehicles in that market.

BYD did not respond to a request for comment. Company Chairman Wang Chuangfu in March told investors in a private meeting that BYD expects exports to help shore up profitability this year as a domestic price war weighs on its margins.

It’s common for automakers to charge slightly different prices for exports of the same or similar versions of a vehicle. But the sheer size of BYD’s upcharges for overseas markets is rare, said Sam Fiorani, vice president of global forecasting at market research firm AutoForecast Solutions.

“Globally marketed vehicles are usually priced in a narrow range,” Fiorani said.

The differential, in part, reflects cutthroat competition in China, the world’s largest auto market, where dozens of EV brands are waging a price war. BYD’s entry-level Seagull electric hatchback sells for less than $10,000 at home.

BYD’s big export markups also underscore the massive cost advantages that China’s EV industry has over foreign competitors. China’s EV leader has squeezed costs from every stage of production, from raw materials to batteries, land and labor, according to experts on China's auto industry and battery-cost data provided to Reuters. In addition, Beijing has heavily subsidized both domestic and foreign brands selling EVs in China, where electric and plug-in hybrid vehicles accounted for more than