By TOM KRISHER and KEN MORITSUGU (Associated Press)
LIVONIA, Mich. (AP) — An inexpensive electric car named the Seagull is making American car manufacturers and politicians very worried.
The car was introduced by a Chinese car company last year. BYDIn China, it's sold for about $12,000 and is well-made, comparable to U.S.-made electric cars that cost three times as much. A shorter-range version is available for less than $10,000.
Due to tariffs on imported Chinese vehicles, the Seagull isn't expected to be available in the U.S. soon. If it were imported, it would likely be sold for more than $12,000.
However, the sudden rise of low-cost electric vehicles from China could have a significant impact on the global auto industry, similar to the effect of Japanese car manufacturers during the oil crises of the 1970s. BYD, which stands for 'Build Your Dreams,' could pose a serious threat to the U.S. auto industry.
Sam Fiorani, a vice president at AutoForecast Solutions near Philadelphia, stated, “Any car company that’s not paying attention to them as a competitor is going to be lost when they hit their market. BYD’s entry into the U.S. market isn’t an if. It’s a when.”
U.S. politicians and manufacturers view Chinese EVs as a significant threat. The Biden administration is expected to announce 100% tariffs on electric vehicles imported from China, citing a threat to U.S. jobs and national security. The Alliance for American Manufacturing argues in a paper that government subsidized Chinese EVs “could end up being an extinction-level event for the U.S. auto sector.” Earlier this year, Tesla CEO Elon Musk told industry analysts that Chinese EVs are so good that without trade barriers, “they will pretty much demolish most other car companies in the world.”
The Alliance for American Manufacturing states in a paper that government subsidized Chinese EVs could have a significant negative impact on the U.S. auto sector.
Elon Musk stated earlier this year that Chinese EVs are so advanced that without trade barriers, “they will pretty much demolish most other car companies in the world.”
Outside of China, electric vehicles are often expensive and targeted at a wealthier market. However, Chinese brands, which are not yet globally recognized, are offering affordable options that will appeal to the masses, aligning with the encouragement from various governments to shift away from gasoline-powered vehicles to combat climate change. Bill Russo, the founder of the Automobility Ltd. consultancy in Shanghai, said, “The Western markets did not democratize EVs. They gentrified EVs.” Russo added, “And when you gentrify, you limit the size of the market. China is all about democratizing EVs, and that’s what will ultimately lead Chinese companies to be successful as they go global.” Inside a large garage in an industrial area west of Detroit, a company called Caresoft Global disassembled a Seagull that its China office purchased and shipped to the U.S.
Terry Woychowski, the president of Caresoft Global and a former chief engineer at General Motors, described the car as a “clarion call” for the U.S. auto industry, which lags behind China in developing low-cost EVs. After the disassembly, Woychowski, who has been in the auto industry for 45 years, expressed doubt about whether U.S. automakers can adapt. “Things will have to change in some radical ways in order to be able to compete,” he said. BYD can make the Seagull for a low cost because the entire car is designed to be efficient, not because of a single miracle. The car can go 252 miles per charge.
BYD keeps costs down by using its expertise in making batteries, especially lithium iron phosphate batteries, which cost less than lithium-ion batteries but have lower range.
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BYD manufactures many of its own parts, including electric motors, dashboards, bodies, and headlights. Its large scale of 3 million vehicles sold worldwide last year gives it an advantage.
Having everything in-house gives BYD a significant advantage, according to Woychowski. BYD designs its vehicles with cost and efficiency in mind, for example, the Seagull has only one windshield wiper to save on weight, cost, and labor.U.S. automakers typically do not design vehicles in this cost-efficient manner, incurring excess engineering costs. Some requirements for combustion engines, like certain hoses, are not needed for electric vehicles.
The Seagull is lighter than the Chevrolet Bolt, allowing it to travel farther per charge on a smaller battery.
Detroit needs to re-learn design and engineering to keep up with electric vehicles, shedding old practices and determining which procedures to keep for safety and quality.
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Even with its minimalist design, the Seagull still feels high-quality. The doors close firmly, and the seats have stitching that matches the body color, a feature usually found in more expensive cars. The Seagull tested has safety features like air bags, rear disc brakes, and electronic stability control.
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While the acceleration is not as strong as other EVs, the Seagull is lively and can enter a freeway in heavy traffic. Its top speed is limited to 81 mph (130 kilometers per hour).
BYD would need to modify its cars to meet stricter U.S. safety standards, which could add $2,000 to the Seagull's cost, according to Woychowski.
BYD is selling the Seagull, which is called the Dolphin Mini in some other countries, in four Latin American nations for about $21,000, which is double its cost in China. The higher price includes shipping fees and also shows the higher profits possible in less competitive markets than China.
BYD offers bigger models like the Seal in Europe, starting at 46,990 euros ($50,000) in France. According to the China Passenger Car Association, Thailand and Brazil were the top two overseas markets for the Chinese maker in the first two months of this year.
BYD manufactures electric buses in California and has mentioned that it is still deciding whether to sell cars in the U.S. The company is considering locations for a factory in Mexico, but that would be for the Mexican market, as stated by two company executives in media interviews earlier this year.
The company is not selling cars in the U.S. mainly because of 27.5% tariffs on the sale price of Chinese vehicles when they arrive at ports. 25% of the tariff was imposed by Donald Trump, and it is still in place under Joe Biden. Trump argues that the rise of EVs supported by Biden will lead to job losses in U.S. factories, with the work moving to China.
The Biden administration has supported legislation and policies to establish a U.S. EV manufacturing base. The administration is also investigating
cars made in China
gather sensitive information
Some members of Congress are urging Biden to ban imports of Chinese vehicles, while others have proposed even higher tariffs. This includes vehicles made in Mexico by Chinese companies that would mostly come in without tariffs.
Ford CEO Jim Farley has noticed Caresoft’s work on the Seagull and observed BYD’s fast growth globally, especially in Europe, where he previously managed Ford’s operations. He is taking steps to transform his company. He informed analysts earlier this year that a small "skunkworks" team is developing a new, small EV from scratch to control costs and maintain high quality. According to Farley, Chinese manufacturers sold almost no EVs in Europe two years ago, but now they have 10% of the electric vehicle market. It is likely that they will export globally and possibly sell in the U.S. that can Ford is getting ready to respond to this. "Don’t take anything for granted," said Farley. "This CEO doesn’t.".
A small, low-priced electric vehicle called the Seagull has American carmakers and politicians worried. Launched last year by Chinese automaker BYD, it is sold for about $12,000 in China. Despite its low price, it performs well and is put together with craftsmanship that rivals U.S.-made electric vehicles costing three times as much. Tariffs on imported Chinese vehicles will likely prevent the Seagull from reaching American shores for now. However, the swift emergence of low-priced EVs from China could disrupt the global auto industry in ways not seen since Japanese manufacturers arrived during the oil crises of the 1970s.
Ford CEO Jim Farley has seen Caresoft’s work on the Seagull and observed BYD’s rapid growth across the globe, especially in Europe, where he used to run Ford’s operations. He’s moving to change his company. A small “skunkworks” team is designing a new, small EV from the ground up to keep costs down and quality high, he told analysts earlier this year.
Chinese makers, Farley said, sold almost no EVs in Europe two years ago, but now they have 10% of the electric vehicle market. It’s likely they’ll export around the globe and possibly sell in the U.S.
Ford is preparing to counter that. “Don’t take anything for granted,” Farley said. “This CEO doesn’t.”
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