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China's new cheap electric car causes concern among automakers and politicians, who see the vehicle as a threat. Discover this compact that is shaking up the automobile industry.
The electric vehicle market is undergoing a transformation, and one of the biggest catalysts for this change comes from China. In 2023, Chinese automaker BYD launched the Seagull, a cheap electric car that is shaking up the global auto industry. Sold for around US$12.000 in China, and with a even more affordable version for less than $10.000, this low-cost electric car has caused concern among American automakers and politicians, who see the vehicle as a threat to United States dominance in the sector.
Cheap electric car from China impacts US auto industry
The Seagull, a low-cost electric car, has generated great interest for its affordable price and impressive performance. Although the vehicle arrived in Brazil under the name Dolphin Mini, its reception in the national market was mixed, mainly due to its price, which ended up being above consumers' expectations. However, in international markets, especially in the United States, the Seagull has emerged as a viable and competitive alternative to locally manufactured electric vehicles (EVs).
In the United States, the quality of the Seagull is compared to that of domestically produced EVs, which often cost up to three times as much. This reality has led the American auto industry to reflect on the challenges that a cheap electric car from China could pose.
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Tesla's CEO, Elon Musk, even stated that, without trade barriers, “Chinese electric vehicles would practically destroy most other automakers in the world”. Musk's statement highlights the potential impact that a low-cost electric car like the Seagull could have in markets where prices are still a considerable barrier to mass adoption of EVs.
Tariffs and protection of the American market
Faced with this threat, the government of United States announced 100% tariffs on Chinese electric vehicles, which should be applied later this year. These measures were justified by concerns about national security and the protection of jobs in the American automobile sector.
However, experts like Sam Fiorani, vice president of AutoForecast Solutions, believe that BYD's entry into the US market is inevitable. According to Fiorani, “BYD's entry into the US market is not an if, but a when”, pointing to the fact that tariffs may only delay, but not prevent, the arrival of cheap electric cars from China to the American market.
The technology and efficiency of BYD's cheap electric car
The Seagull is notable not only for its affordable price, but also for the technology involved in its production. Weighing about 900 pounds less than the Chevrolet Bolt, the Seagull can travel up to 252 miles on a single charge.
This performance is possible thanks to BYD's own in-house manufacturing of batteries and other components, which significantly reduces production costs. In 2023, the BYD has sold more than 3 million vehicles globally, consolidating itself as one of the main players in the electric vehicle market.
The Seagull's efficiency and production cost are evidence that it is possible to manufacture high-quality electric vehicles at lower prices, defying the logic that EVs need to be expensive to be effective. This reality puts pressure on traditional automakers to innovate and reduce their costs, or risk losing market share to more agile and economically viable competitors, such as BYD.
The future of the automobile industry and the role of EVs
The emergence of a cheap electric car like the Seagull also has implications for the future of the global auto industry. The reduction in electric vehicle prices could accelerate consumers’ transition to this type of technology, especially in markets where acquisition cost is still a barrier. Furthermore, EVs, like the Seagull, are generally cheaper to operate than electric-powered vehicles. gasoline, with reduced maintenance and supply costs.
Electric cars have fewer moving parts, which reduces the need for frequent maintenance. Most importantly, they do not produce exhaust pollution, contributing to improving air quality and reducing pollutants harmful to public health.
A study of the Harvard University estimated that pollution from dirty energy sources was responsible for one in five premature deaths worldwide in 2018. In this context, the mass adoption of electric cars could have a significant positive impact on global public health.
Are electric vehicles really a cleaner alternative to traditional vehicles?
Although the production of batteries and mineral mining required to manufacture EVs raise environmental concerns, electric vehicles are still considered a cleaner alternative to traditional gasoline-powered vehicles.
According to data from the US Energy Information Administration, gas-powered vehicles release, on average, the equivalent of 12.594 pounds of carbon air pollution per year, While all electric vehicles, like the Seagull, release significantly less, about 2.727 pounds annually.
The MIT report projects that, By 2050, gasoline-powered cars will release approximately 225 grams of carbon air pollution per mile, while battery-powered EVs are expected to produce just 50 grams per mile, assuming renewable energy costs continue to fall. This trend suggests that the comparison between gasoline-powered vehicles and EVs will increasingly favor electric ones as more clean energy sources are incorporated into the electrical grid.
With the imminent entry of cars like the Seagull into the global market, Western automakers will have to face a new type of competition, based not only on price, but on technology and production efficiency. The impact of this new reality could be profound, not only on the industry, but also on the lives of consumers and the health of the planet.
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