The BYD (SZ:002594) Seal, a Chinese electric vehicle (EV) now available for sale in Europe, has a 25% cost advantage over its European and North American counterparts, according to a recent report by UBS Evidence Lab published on Tuesday. The Shenzhen-based auto giant's vertically integrated component system and advanced technology enable it to manufacture the BYD Seal at 35% less cost than its competitors, including Tesla (NASDAQ:TSLA).
The launch of the BYD Seal into the European market was announced on Monday. The model's 550-kilometer and 700-km range versions are priced at €44,900 and €50,990 ($48,165 and $54,700), respectively, marking a 43% and 84% increase from their prices in China.
Paul Gong, UBS head of China Autos Research, noted that the gross profit margin of the BYD Seal is about 16%, with earnings before interest and taxes standing at 5%. These figures are comparable to those of fuel vehicles in the global mainstream car market. Furthermore, 75% of the BYD Seal’s parts, including the battery, are produced by BYD itself. Some components are sourced from external suppliers like Qualcomm (NASDAQ:QCOM).
According to UBS's report, Western carmakers may lose about one-fifth of their global market share due to cheaper and more cost-effective Chinese EVs. By 2030, Chinese carmakers are predicted to capture about 33% of the global auto market from last year's 17%, thanks to their advantages in electrification. In contrast, Western auto brands could see their market share drop to 58% from 81% during this period. Tesla’s market share is expected to rise from 2% to 8%.
In terms of regional performance, Chinese brands are projected to account for 80% of the Chinese market by the end of the decade and increase their shares in the European market to 20% from the current 3%. However, UBS anticipates that Chinese carmakers will not see particular success in the United States, Japan, South Korea, and India.
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