Manufacturing - Markets - Marvels

 

In China, they call it the Seagull, and it has looks to match. It is sleek and angular, with bright, downward-slanting headlights that have more than a hint of mischievous eyes about them.

It is, of course, a car. A very small one, designed as a cheap city runabout – but it could have huge significance. Available in China since 2023, where it has proved extremely popular, it has just been launched in Europe with the name Dolphin Surf (because Europeans apparently aren't as keen on seagulls as Chinese people).

When it goes on sale in the UK this week, it's expected to have a price tag of around £18,000. That will still make it, for an electric car on western markets, very cheap indeed.

BYD is already the biggest player in China. It overtook Tesla in 2024 to become the world's best-selling maker of electric vehicles (EVs), and since entering the European markets two years ago, it has expanded aggressively.

"We want to be number one in the British market within 10 years," says Steve Beattie, sales and marketing director for BYD UK.

"Chinese brands are making massive inroads into the European market," says David Bailey, professor of business and economics at Birmingham Business School.

In 2024, 17 million battery and plug-in hybrid cars were sold worldwide, 11 million of those in China. Chinese brands, meanwhile, had 10% of global EV and plug-in hybrid sales outside their home country, according to the consultancy Rho Motion. That figure is only expected to grow.

"[China has] a huge cost advantage through economies of scale and battery technology. European manufacturers have fallen well behind," warns Mr Bailey.

"Unless they wake up very quickly and catch up, they could be wiped out."

Cut-throat competition in China

China's car industry has been developing rapidly since the country joined the World Trade Organization in 2001. But that process accelerated rapidly in 2015, when the Communist Party introduced its "Made in China 2025" initiative. The 10-year plan to make the country a leader in several high-tech industries, including EVs, attracted intense criticism from abroad, and particularly the US, amid claims of forced technology transfers and theft of intellectual property – all of which the Chinese government denies.

Fuelled by lavish state funding, the plan helped lay the groundwork for the breakneck growth of companies like BYD – originally a maker of batteries for mobile phones – and allowed the Chinese parent companies of MG and Volvo, SAIC and Geely, to become major players in the EV market.

"The general standard of Chinese cars is very, very high indeed," says Dan Caesar, chief executive of Electric Vehicles UK.

"China has learned extremely quickly how to manufacture cars."

Yet competition in China has become ever more cut-throat, with brands jostling for space in an increasingly saturated market. This has led them to hunt for sales elsewhere.

'Naked protectionism' from the US?

Concerns that Chinese EV imports could flood international markets at the expense of established manufacturers reached fever pitch in 2024.

In the US, the Alliance for American Manufacturing warned they could prove to be an "extinction-level event" for the US industry, while the European Commission president Ursula von der Leyen suggested that "huge state subsidies" for Chinese firms were distorting the European market.

The Biden administration took dramatic action, raising import tariffs on Chinese-made EVs from 25% to 100%, effectively making it pointless to sell them in the US.

It was condemned by Beijing as "naked protectionism".

Chinese government is 'not hell-bent on surveillance'

Joseph Jarnecki, research fellow at defence and security think-tank The Royal United Services Institute, argues that potential risks can be mitigated.

"Chinese carmakers exist in this highly competitive market. While they're beholden to Chinese law and that may require compliance with national security agencies, none of them want to damage their ability to grow and to have international exports by being perceived as a security risk," he says.

"The Chinese government equally is conscious of the need for economic growth. They're not hell-bent on solely conducting surveillance."

- Author: Theo Leggett, BBC

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