BYD is selling some models in foreign markets for double or triple what it charges in China. How long can that last?
Manufacturing electric cars in China is like participating in a circular firing squad. The competition is so fierce that companies are selling many cars almost at cost — or below. It goes without saying you can’t buy apples for 25 cents each, sell them five for a dollar, and expect to make a profit.
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 the price increase BYD charges in export markets is rare, Sam Fiorani, vice president of global forecasting at AutoForecast Solutions toldBYD’s big export markups also underscore the massive cost advantages that China’s EV industry has over foreign competitors.
BYD has an advantage over legacy automakers with its vertically integrated supply chain. It makes almost all components of its cars in-house rather than farming them out to suppliers. Lowering the cost of batteries has been key.
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