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BYD has criticised the UK’s new electric car subsidy scheme designed to keep out Chinese brands as “stupid”, warning that the discounts would work like a “drug” that will hurt the country’s market over the longer term.
In an interview with the Financial Times, BYD’s executive vice-president Stella Li, who oversees the carmaker’s international expansion, predicted BYD’s sales would not be affected by the UK government policy some executives have dubbed “backdoor Chinese tariffs”. She also pledged to create more than 5,000 UK jobs through dealerships by next year as part of its expansion policy in Europe.
The UK government last week announced a £650mn grant incentivising customers to purchase battery cars, with each model assessed according to the emissions of the electricity grid in the country or countries of critical production stages, essentially excluding vehicles made in China.
“It does not make any sense,” Li said. “This subsidy actually sounds like they will give some companies a benefit but it’s more like a drug. If you get rid of this, you will suffer.”
Under the scheme, customers buying cars considered “greenest” will receive a discount of up to £3,750 per vehicle when they buy a new electric car priced less than £37,000, while others in a lower emissions band will receive up to £1,500.
“The question is, is there any European government who can afford to fight against Chinese-made cars forever? No,” said Alfredo Altavilla, the former boss of ITA Airways who serves as special adviser for BYD’s European operations. “So what’s the purpose of doing all this?”
With their affordable battery-run cars equipped with advanced software, BYD and other Chinese brands have been expanding their market share to about 5 per cent in the UK and European EV markets, according to Schmidt Automotive Research.
To support its expansion, BYD plans to produce locally via its plants in Hungary and Turkey and open 2,000 retail stores across Europe, including about 280 in the UK. Each dealership will work exclusively for BYD, employing about 20 people.
Britain has not followed Brussels in imposing levies of up to 45 per cent on Chinese EV imports, alleging they received unfair subsidies from Beijing, instead opting for its subsidy programme.
The rise of the likes of BYD has sparked alarm across Europe’s traditional car industry, whose executives argue that Chinese importers will be able to absorb any tariffs or cut their prices while still making profit on their vehicles because they can build cars more cheaply in their domestic factories.
Underscoring that cost advantage, Stellantis-backed Leapmotor started offering the UK’s cheapest battery car after reducing its prices to match the government grant.
Meanwhile, the Chinese embassy in the UK has also warned the government against “exclusive policies and protectionism” following the unveiling of the new subsidies.
Li’s comments came as BYD signed a new sponsorship deal with Italian football club Inter Milan. In addition to having its name on the back of the shirts of Inter Milan footballers, BYD will provide the team and its top management with about 70 vehicles.
“My dream is in five years, you’re walking in a supermarket and everyone will know, ‘oh, BYD, we know them, they’re a high-tech company’,” Li said.
Additional reporting by Josh Noble in London
