Tariffs and the Difference between Chinese BEVs & PHEVs

Last year’s tariff increases from the EU on Chinese BEVs weren’t exactly a surprise. What was a surprise was that plugin hybrids weren’t affected by the rising tariffs, which caught most Chinese OEMs by surprise. Previously, they had been betting in launching BEV models in Europe, with the PHEV market being an afterthought. But this seems to be changing, as the BYD Seal U PHEV’s success shows.

Comparing the best selling Chinese BEVs’ competitiveness to the local competition, and then doing the same for the best selling Chinese PHEVs, we notice the difference that increased tariffs make and the reason why I think China’s top OEMs will focus on the PHEV market in the near future.

As such, looking at the specs of the three best selling Chinese BEVs in Europe — the MG 4 (11,000 units), BYD Seal (8,000 units), and BYD Dolphin (7,000 units) — and comparing them to the local direct competition — the VW ID.3 in the case of the MG 4 and BYD Dolphin, and the VW ID.7 in the case of the BYD Seal — here’s what we get:

• MG 4 (51 kWh version): 350 km WLTP range, 88 kW DC charge, 33,000 euros (in the Netherlands);
• BYD Dolphin (61 kWh version): 427 km, 88 kW DC change, 37,000 euros;

vs.

• VW ID.3 (52 kWh version): 388 km, 145 kW DC charge, 30,000 euros.

And …

• BYD Seal (61 kWh version): 460 km, 110 kW DC charge, 42,000 euros;

vs.

• VW ID.7 (77 kWh version): 615 km, 190 kW DC charge, 49,000 euros.

As we can see, the ID.3 manages to be cheaper than the two Chinese EVs, and it doesn’t really lose much on specs. On the contrary, it charges almost twice as fast as the Chinese models, while regarding range, is stays roughly between the two. So, it’s a win for the German hatchback.

As for the midsize EVs, while the German model has much better specs, and is more spacious, and offers a wagon body, all plus points in Europe, the Seal compensates by being a whole 7,000 euros cheaper. So … you get what you pay for. It’s a tie between these two.

Interesting note: Have you noticed that regarding DC charging, both German EVs are in a different league compared to their Chinese competitors? For all the talk of Chinese EVs being years ahead of the competition, as with everything, they also have their weak spots, which legacy OEMs can explore. And DC charging is one of them. Another is efficiency. Because kWh are cheap in China, local makes do not focus much on efficiency. A third disadvantage is the little experience they have on the European market, which makes it harder to adapt their models to local tastes. Case in point: station wagons.

Now, looking at the specs of the three best selling Chinese PHEVs in Europe — the BYD Seal U PHEV (22,000 units), MG HS PHEV (10,000 units), and Chery-owned Jaecoo 7 PHEV (3,500 units) — and comparing them to the local direct competition — the Volvo XC60 PHEV and VW Tiguan PHEV in the case of the MG HS and BYD Seal U, and the Ford Kuga PHEV in the case of the Jaecoo 7 — here’s what we get:

• BYD Seal U PHEV: 80 km WLTP electric range, 18 kW DC charging, 40,000 euros;
• MG HS PHEV: 103 km electric range, no DC charging, 41,000 euros;

vs.

• Volvo XC60 PHEV: 82 km electric range, no DC charging, 62,000 euros;
• VW Tiguan PHEV: 100 km electric range, 50 kW DC charging, 47,000 euros.

And…

• Jaecoo 7 PHEV: 90 km electric range, no DC charging, 38,000 euros;

vs.

• Ford Kuga PHEV: 56 km electric range, no DC charging, 39,000 euros.

In the first case, looking just at specs, the Volvo model is completely out of its depth here, charging some 20,000 euros extra for a badge and extra power. Even there, the MG HS has a combined power of 340 hp, so it’s no slouch either…. So, the Volvo is out. By a mile….

As for the German crossover, it is not only closer in price to the Chinese competitors, but it also has competitive specs — namely, the 50 kW DC charging. But, still, it is 6,000 to 7,000 euros more expensive than the MG and BYD models…. Does DC charging makes that much of a difference in a plugin hybrid? So, the two Chinese EVs tie at the top, thus beating the Volkswagen model.

Finally, comparing the little known Jaecoo 7 with the Ford Kuga plugin hybrid versions: while pricing wise they are more or less equal, with the Jaecoo earning a slight edge thanks to being 1,000 euros cheaper, when it comes to electric range, it’s a no-brainer, with the Jaecoo having 61% more range than the Ford (90 miles vs. 56 miles) and the Spanish-made Ford looking like it’s a whole generation behind the Chery-owned crossover. A clear win for the Jaecoo.

So, while in the BEV field the odds seem to favour the locally made brands, in the PHEV field, the lack of significant tariffs allows for competitive pricing of the Chinese models, which changes everything. Either local OEMs go after competitive specs, at the cost of being priced out by the Chinese competition, or, when betting on price, the specs are one step behind those of the direct competition coming from China.

And there you go. As they are, the increased BEV tariffs create a level playing field for local makes, without isolating them from the Chinese competition. So, while they remain temporarily protected, they cannot sit on their laurels, because while neutered from their main selling point, price, the Chinese competition will continue to evolve. Current weak spots, like DC charging, will not last forever, so either European OEMs invest in competitive BEVs now, allowing them to go head to head with the best of China in a few years, or the Chinese EVs will win the race — not because they are cheaper, but because they are better.

Images courtesy of BYD.