BYD has decided to stall its plans to enter Canada, deterred by the country’s 100% federal tariffs on EVs imported from China. But here’s how BYD will likely make the move to enter the US or Canada anyway.
The decision puts a pin on the plan after months of legwork over the summer, with BYD execs meeting with dealers across Canada to discuss a possible distribution network of the brand’s vehicle and talking with lobbyists on how to get the federal government on board, Automobile News reports.
Back in August, Prime Minister Justin Trudeau told reporters that the government would follow the US’s plan to impose stiff tariffs on EV imports from China, all while BYD was busy trying to set the deal in place. Over the summer months, a lobbyist with Toronto’s Crestview Strategy told Automotive News that they had arranged six exchanges with BYD and senior members of the government, all set on clearing the way for EV sales and BYD setting up shop in the country.
Since then, communications have halted, and would-be distributors are in a holding pattern, according to sources who spoke to Automotive News. BYD hasn’t yet commented.
BYD is already a leading EV brand in Mexico and operates in about 90 markets – but tariffs have been a roadblock to breaking into the North American market, a situation that is likely to get more complicated with recently elected Donald Trump.
BYD could still launch an EV in US and Canada
That said, BYD could still launch in the US and Canada, even with 100% tariffs. Analysts say that the company could easily absorb the tariffs on some vehicles – to a point. And it would have to strategize carefully about which model to bring over.
The Atto-3 SUV / Source: BYD Europe
“There is the possibility that even with the 100-per-cent tariff, that they could still launch a model that could compete, but it’s a matter of which one, if it’s the right model for the market,” Lei Xing, China auto industry expert analyst told Automotive News.
The BYD Atto 3 and Seal seem likely candidates, he said, but US and Canadian consumers would likely have to pay a lot more for them (I guess BYD would be willing to absorb costs only to a point).
In France, for example, you can get an Atto 3 for about $45,000, and a Seal for $65,000. Of course, the subcompact BYD Seagull, the brand’s smallest car that sells for around $10,000 in China, would be an easier choice in terms of cost control. The brand plans to launch a European version in 2025, but the North American market isn’t as welcoming to small cars, Lei Xing said.
BYD Seagull. Source: BYD
The North American move is on hold for now, Chinese brands as ambitious as BYD won’t likely be put off by tariffs for too long – it’s just a matter of when, and with which vehicle.
“Imported vehicles cost a lot more, but these companies really want to be into this marketplace, said Sam Fiorani, vice-president of global vehicle forecasting at US-based AutoForecast Solutions, told Automotive News. “North America is the crown jewel for any global automaker. So, finding a way to get any volume sold, they’ll take the cost.”
Some other options too cited by Fiorani include building market share and brand recognition – where I am in France, BYD ads are literally everywhere. Next step, set up assembly plants somewhere in North America, or import vehicles into Canada from other countries other than China – but then again, Canada could respond accordingly with tighter restrictions, so it’s a moving target.
Also, over-the-air infrastructure for Chinese vehicles could be problematic since Canada seems likely to follow the US’s proposed rules banning Chinese hardware and software for connected vehicles in the interest of national security. So in order to work around that, companies would need a separate OTA infrastructure to process data locally, not back and forth to China.
Meanwhile BYD is seemingly very large and in charge. It’s currently ramping up production by close to 200,000 units to meet demand, and the company has hired nearly 200,000 new employees over the past three months.
Photos courtesy of BYD
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Publish date : 2024-11-07 02:12:00
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