Caixin
Aug 24, 2017 05:17 AM
BUSINESS & TECH

Carmaker BYD Targets Villagers With ‘Mini’ Electric Vehicles

BYD Auto Co. Ltd. says its planned new battery-powered subcompacts will target third- and fourth-tier cities and gradually dominate BYD’s electric-vehicle car business. Above, workers construct automobiles at a BYD production line in Shenzhen, Guangdong province, in August 2010. Photo: IC
BYD Auto Co. Ltd. says its planned new battery-powered subcompacts will target third- and fourth-tier cities and gradually dominate BYD’s electric-vehicle car business. Above, workers construct automobiles at a BYD production line in Shenzhen, Guangdong province, in August 2010. Photo: IC

One of China’s leading electric-vehicle (EV) makers, BYD Auto Co. Ltd., says it plans to launch “mini and small-size” EVs within two years in reaction to rising demand for budget transportation in small towns and villages.

The all-new, battery-powered subcompacts will target third- and fourth-tier cities and gradually dominate BYD Auto Co. Ltd.’s EV car business, company founder and Chairman Wang Chuanfu said at a Tuesday news conference.

Wang predicted miniature EVs will eventually account for 75% of all BYD’s EV car sales.

Consumer demand for EVs has been surging in China. First-half EV sales surged nearly 63% compared to the same period last year to about 132,000 units, according to the China Association of Automobile Manufacturers. EV sales growth far outpaced the entire auto market, which saw first-half sales climb 3.8% to 13.35 million units.

A government effort to promote zero-emissions transportation in the fight against air pollution has helped spur EV sales. For example, manufacturers and buyers can qualify for government subsidies.

And in big cities, EV buyers have been given a better shot than other drivers at obtaining license plates, which are tightly controlled by local authorities as a traffic-control measure. In congested Beijing, for example, licenses are distributed through a bimonthly lottery system. In the April session, 1 out of 800 candidates got the OK to have a gasoline-fueled car, while half of applicants secured car plates for a renewable-energy vehicle.

BYD’s existing EV models have been selling well in first-tier cities such as Beijing and Shanghai. But in villages and towns, its cars have faced competition from battery-powered quadricycles.

Low-speed, inexpensive quadricycles are typically priced between 10,000 yuan ($1,500) and 30,000 yuan and have been selling like hotcakes in third- and fourth-tier cities. Major markets include Henan, Hebei and Shandong provinces.

Nationwide, quadricycle sales reached 1.2 million units last year, according to the Society of Automotive Engineers of China. That compared to 240,000 EVs, according to the China Passenger Car Association.

Quadricycles have succeeded in part because they can be driven without a driver’s license. Moreover, they do not have to undergo vehicle inspections.

Wang said BYD plans to take advantage of the popularity of quadricycles in smaller communities by appealing to consumers who now trust that EVs can be inexpensive as well as safe.

BYD plans to price its first mini-EV below 100,000 yuan, Caixin has learned. Subsidies could further reduce an EV buyer’s cost.

Thanks to subsidies, a mini-EV model called the EC180 launched in January by Beijing Electric Vehicle Co. Ltd. (BJEV), a subsidiary of the Beijing Auto Industry Corp., has been selling in Beijing for 49,800 yuan, 67% below the list price.

Mini-EVs could eat into the market for quadricycles, which are not subsidized and are now undergoing government scrutiny.

Quadricycles have been targeted by policymakers trying to tighten industry standards and regulations. A crackdown was to be discussed at a National People’s Congress meeting in March, but the effort was shelved due to legislative support for quadricycle-makers.

Contact reporter Coco Feng (renkefeng@caixin.com)

You've accessed an article available only to subscribers
VIEW OPTIONS
Share this article
Open WeChat and scan the QR code
GALLERY