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FIERCE new-car competition in China’s domestic EV market has seen its manufacturers charge export buyers up to three times the car’s price in China.

The reason, according to research by Reuters into BYD’s pricing policy, is to compensate for very low margins in China.

Reuters found that BYD sometimes charges more than double or triple its China sticker prices for its vehicles abroad.

It counters concerns by US and European governments that their car industries are threatened and could be destroyed by a wave of cheap Chinese electric vehicles.

But Reuters said that so far, China’s top EV maker, BYD, “has dramatically hiked export prices compared to what it charges at home rather than undercut foreign rivals”.

“The goal: to rake in hefty profit margins the automaker cannot get in China amid fierce competition,” Reuters said.

The Reuters review covered BYD’s pricing in five of its biggest export markets. It said BYD charges more than double — sometimes nearly triple — the price it gets for three key models in China, 

The BYD Atto 3 EV, also sold in Australia, sells for $US19,283 ($A29,379) in China.

In Germany, it is $US42,789 ($A65,192). Reuters points out that this price is still competitive with comparable electric vehicles in the German market.

In Australia, the Atto3 is priced from $A48,011 (equivalent to $US31,512).

Reuters reviewed pricing published by BYD or its dealers in five of its leading export markets — Germany, Brazil, Israel, Australia and Thailand — that commonly offered three of its most popular electric vehicles, the Dolphin and Seal sedans, and the Atto 3 SUV. In one case, Israel, the Seal was not offered.

In those markets, the starting price for the BYD Atto 3 ranged from 81 per cent to 174 per cent higher than in China.

Dolphin prices ranged from 39 per cent to 178 per cent higher, and Seal prices from 30 per cent to 136 per cent higher.

Reuters said comparing starting prices by market was complicated by regional differences in available trim levels. 

“In some cases, entry-level exported vehicles examined by Reuters had slightly better equipment than the lowest-priced model in China,” it said.

“In cases where apples-to-apples comparisons were possible at various trim levels, BYD’s export prices typically were still much higher than in China. 

“For instance, the closest version of the Dolphin on sale in Germany, with the same battery range, sells for $US37,439 ($A57,040) — more than double the $US16,524 ($A25,175) price tag in China.

The upgraded Seal version sells for $US48,139 ($A73,343) in Germany, 59 per cent more than its $US30,317 ($A46,190) China price.

By comparison, the Reuters analysis found that Tesla, which has a higher cost base than Chinese rivals, sells its Chinese-made Model 3 for only 37 per cent more in Germany than in China, according to Tesla’s web site.

Car-makers can face hefty costs in exporting cars. But Reuters said BYD’s large export premiums are more than enough to cover them and deliver thousands of dollars in additional profit per vehicle.

Reuters used an analysis conducted by A2MAC1, which disassembles cars for automakers to assess their competitors’ products.

Based near Paris, A2MAC1 examined the European version of the BYD Dolphin, which sells for about $US35,000 ($A53,325), and a China version selling for about $US15,000 ($A22,850).

“The European Dolphin is slightly longer and has extra features, including a slightly bigger battery, a more comfortable suspension and additional sensors,” it reported.

“Still, accounting for those upgrades, along with shipping and import taxes, A2MAC1 estimated that BYD’s profit margin on the European car was about $US7400 ($A11,275) more than whatever it clears on the same car in China.”

Reuters said its research highlighted the huge cost advantages that China’s EV industry has over foreign competitors.

China’s EV leader has squeezed costs from every stage of production, from raw materials to batteries, land and labour, according to experts on China’s auto industry and battery-cost data provided to Reuters.

BYD has an advantage over major car-makers with its vertically integrated supply chain. It makes almost all components of its cars in-house rather than contracting to independent suppliers.

Lowering the cost of batteries — an EV’s most expensive component — has been key. BYD and other Chinese car-makers and suppliers have spent the last two decades securing access to mines around the world to lock up critical battery minerals such as lithium and cobalt.

Data provided to Reuters by market intelligence firm Benchmark Mineral Intelligence, shows the price for batteries in China to be around 18 per cent lower in 2024 than in Europe.

By Neil Dowling

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