BYD introduced its latest high-end electric vehicle on Sunday, unveiling the Yangwang U9, a supercar with a price tag of $233,450.
This high-performance, fully-electric model is set compete with luxury, gas-guzzling sports cars such as those offered by Ferrari and Lamborghini. The U9 is able to drive 280 miles on a single charge.
For now, the Yangwang U9 is slated to be sold exclusively in China.
The vehicle boasts some impressive specs as it is able to go from 0-60mph in just 2.36 seconds, with a top speed of 192mph.
It also has a special suspension system, which enables it to drive on three wheels, jump, or even dance.
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BYD surpassed Tesla as the world’s leading EV seller in the last quarter of 2023 and is recognized for producing affordable electric vehicles.
Thanks to generous subsidies from the Chinese government, China is now pumping out more EVs than they know what to do with. Not only are they highly affordable, but they are increasingly advanced.
The allure of these cars has led Europeans to buy them in droves. But US import tariffs – and their exclusion from a popular $7,500 federal tax exemption – have kept them well away from North America.
Trade barriers imposed by the Biden administration were a deal breaker as part of the Inflation Reduction Act.
This stated that from 2024 vehicles containing battery parts from ‘a foreign entity of concern’ will be excluded from the $7,500 tax credit designed to increase the uptake of EVs by Americans. That, of course, includes China.
During Donald Trump’s presidency a 27.5 percent tariff was imposed on all cars imported from China. Compared to the US, Europe has been fairly inviting to Chinese manufacturers with tariffs of just 10 percent.
BYD is now marketing luxury models under the Yangwang and Fang Cheng Bao brands.
The Yangwang U9 is a significant addition to BYD’s premium vehicle lineup, demonstrating how the company wishes to appeal to drivers at all price points in the market.
The Chinese automaker has seen success with its EV endeavors in terms of sales although the stock fell 1.3 percent on Monday.
BYD’s expansion into luxury electric vehicles is not limited to the Yangwang U9, as the company is promising to launch a number of other ‘high-end luxury’ models this year in China at a cost of around $140,000.
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The gap between BYD and Tesla has been steadily closing in recent years, with Tesla selling just 3,456 more EVs than BYD in the last financial quarter.
It is no doubt embarrassing news for Tesla founder Elon Musk who once famously snickered at BYD’s cars during a 2011 appearance on Bloomberg TV.
It comes as demand for electric vehicles is starting to wane generally, as US car dealers complain vehicles are piling up unsold on their lots.
A host of automakers such as Toyota, Volkswagen and General Motors, have invested millions into new EV projects in a bid to take on Tesla.
A driving factor behind BYD’s success is its relative affordability. The entry-level BYD e1 is priced at $10,000 in the US – almost a quarter of the $38,990 price tag attached to a Tesla Model 3.
Bridget McCarthy, head of China operations for Shenzhen-based hedge fund Snow Bull Capital, told Bloomberg: ‘The competitive landscape of the auto industry has changed.
‘It’s no longer about the size and legacy of auto companies; it’s about the speed at which they can innovate and iterate. BYD began preparing long ago to be able to do this faster than anyone thought possible, and now the rest of the industry has to race to catch up.’
And it appears Elon Musk is paying attention. Back in May, a Twitter account devoted to Tesla owners reposted a 2011 clip of Musk snickering at the brand.
However the 52-year-old multi-billionaire shot back: ‘That was many years ago. Their cars are highly competitive these days.’
For seasoned investors, BYD’s appeal was evident from the very beginning. In 2008, Warren Buffett’s Berkshire Hathaway Inc., invested around $230 million for a 10 percent stake in the company.
The following year, late Berkshire Bice Chairman Charlie Munger told Bloomberg TV that BYD was ‘one of the most important subjects affecting the technological future of man.’
He later reaffirmed his view, telling the podcast Acquired that ‘the guy at BYD is better at actually making things than Elon is.’
BYD is run by CEO Wang Chuanfu, 53, who started his career as a government researcher on rare-earth metals critical to batteries and electronics. He is now worth $14.8 billion, according to the Bloomberg Billionaires’ Index.
However, the manufacturer faces an uphill challenge maintaining an American market because none of its vehicles qualify for the Government’s federal tax credit for EVs, worth up to $7,500. This is because the credit has strict rules about cars being manufactured in the US.
What’s more, they are also subject to a 25 percent tariff. And the Wall Street Journal reported last week that the Biden administration is discussing raising this levy even further.
Similarly, Europe also looks poised to join the US in imposing higher tariffs on Chinese car imports.
Nevertheless Chuanfu remains bullish. He recently told an event recently that Chinese automakers must band together to ‘demolish the old legends’ of the autoworld.
BYD is expected to launch its third-generation EVs next year which may offer automated-driving capabilities like Tesla.
But across the board, it appears demand for eco-vehicles is beginning to stagnate.
Research by S&P Global found that global EV sales are set to fall to 1,051,824 in January 2024. This is down from 1,406,407 in December and 1,287,991 in November this year.
Car-shopping website Edmunds told the Wall Street Journal it takes a dealership around three weeks longer to sell an electric car than a gasoline one.
There also appears to be a geographical divide, with some states more likely to adopt the tech than others.
Between July and September, nearly a quarter of all vehicles sold in California were EVs compared to just 3 percent in Michigan, according to the trade body the Alliance for Automotive Innovation.
