The BYD Dolphin Surf has quickly become one of the most affordable electric cars on the market, with prices in China dipping so low that they undercut many comparable petrol-powered models. And while its specifications are far from disappointing, the ultra-low cost is raising red flags in Beijing.
Price Gap Between China and Europe
In Italy, the BYD Dolphin Surf starts at just under €20,000, a price that still places it in the entry-level EV category. But in China, residents can buy the same model for less than €7,000 — a staggering price difference that might sound like great news for consumers, but comes with unintended consequences.
Why the Chinese Government Is Concerned
China’s leadership is increasingly worried about the price war in the electric vehicle sector. The intense competition between domestic brands is driving prices down to unsustainable levels, which could ultimately slow the country’s economic growth.
The problem is that massive investments in electric motors and battery production have yet to be recouped. When finished vehicles are sold at razor-thin margins — or even at a loss — manufacturers see little to no return on those investments.
Challenges in Western Markets
Chinese EV brands have also struggled to gain the expected market share in Western countries, where models are sold at much higher prices than in China. Despite larger profit margins abroad, the sales volumes aren’t enough to offset the losses from the domestic market.
Potential Government Action
To address this, officials are reportedly considering regulations to prevent extreme price competition. The goal is to stabilize the market and ensure manufacturers can operate profitably while continuing to innovate.
A Snapshot of China’s Auto Market
For perspective, the best-selling car in China right now is the Geely Deome Xingyuan, priced at just €9,900. Lawmakers argue that consumers are spending too little on cars, which in the long run could hurt the entire automotive industry’s profitability and sustainability.
