Chinese EVs blow past Tesla and tariffs en route to global reign

Julian Scot-Smith was window shopping at a Porsche dealership with his wife in London's fancy Mayfair district before Christmas, sizing up the SUVs.

- Stephen Wilmot & Santiago Pérez

U.S., European Union and Mexico try to quash accelerating demand for China's hottest electric vehicles.

(AFP)

Then the couple peeked into another dealership around the corner.

“We were thinking of treating ourselves to one of the German brands, but these Chinese cars look fantastic,” said Scot-Smith, eyeing the $60,000 BYD Sealion 7.

Not long ago, few would buy the idea that a Chinese electric-vehicle maker such as BYD could sweep European buyers off their feet, competing against Volkswagen, Toyota and even such luxury brands as BMW and Porsche.

Yet BYD is leading a pack of Chinese automakers whose global export onslaught has surpassed even bullish expectations.

Schmidt Automotive Research.

European market leader Volkswagen, which owns Porsche and Audi, has already had its lunch eaten by local brands in China, which was once estimated to account for more than half of the German company’s global profit. Now, China is coming for VW on its home turf.

In a statement, VW said it had “confidence in our products and our ability to innovate.”

Politics, not market forces, has been the biggest obstacle to China's automakers.

In the U.S., tariffs and restrictions on Chinese software have effectively barred EV imports from China, reflecting fears about jobs and national security. Yet Chinese vehicles could be on the way. Geely, China’s second-largest automaker after BYD, hinted this month it might expand production of its Chinese brands to the U.S., possibly at the South Carolina factory of its subsidiary Volvo Cars.

"The big question for us is where and when," said Ash Sutcliffe, Geely's global communications chief.

In a speech last week at the Detroit Economic Club in Michigan, President Trump said Chinese automakers were welcome as long as they used U.S. factories and workers.

"Let China come in," he said.