By JOE MCDONALD and YURI KAGEYAMA – AP Business Writers
YOKOHAMA (AP) - Osamu Fuukawa, who runs a business converting gasoline-powered Japanese models to electric, has driven many cars in Japan for his work. His favorite car is an import from China: a battery-powered SUV made by BYD.
BYD Auto belongs to a new wave of Chinese exporters of electric cars that are now competing with Western and Japanese brands on their home markets. Tesla Inc. chief financial officer, says that they bring low prices and fast-developing technologies.
Furukawa ordered an ATTO 3 on Jan. 31 because of its attractive price, which was 4.4 million yen (about $33,000), or one-quarter cheaper than a Tesla.
Furukawa, in his office southwest of Tokyo, said, "It's great."
NIO, Geely Group’s Zeekr, and Ora, an SUV-maker Great Wall Motors unit, are also ambitious Chinese EV exporters.
Some brands compete on price.
NIO Inc. has announced that its latest SUV will be available in Europe this year. The company, which persuaded Chinese buyers to pay sticker prices as high as 555,000 yuan (about $80,000), is known for convincing them to pay the same price as Tesla. The ES6 has voice-activated controls, and a range up to 610 km (380 miles).
William Li, founder and CEO of NIO, stated in an interview conducted at the Shanghai autoshow that he was confident that the ES6 would compete in the premium SUV market.
In China, sales of gasoline-electric hybrids and battery-powered vehicles almost doubled to 6.9 millions vehicles last year or half the total global.
This was supported by multi-billion dollar subsidies from the ruling Communist Party. The party is trying to turn China into a creator and innovator of clean energy. This alarms U.S. leaders and European leaders, who view China as a strategic competitor and an industrial power.
David Leah is an analyst at GlobalData. He says that Chinese brands are a'serious competitor'.
Leah wrote in an email that they have a'more competitive technology for batteries' and are able to 'achieve larger economies of scale'.
BYD, a subsidiary of battery manufacturer BYD Co. ranked ahead of Tesla for 2022 total sales with 1.9 million cars. The half of the vehicles were hybrids with gasoline and electricity, while Tesla’s fleet was all electric.
Tesla CEO Elon Musk said, "We have great respect for the Chinese car companies" in a conference call held with financial analysts on Jan. 25, 2017. They work hard and smart.
Chinese manufacturers are creating EVs in order to compete without subsidies, as Beijing is shifting the burden onto the industry and requiring it to earn credits by selling electrics. Prices for compact SUVs with 400-kilometer ranges start at 100,000 yuan (about $14,500).
Tesla CFO Zachary Kirkhorn stated on the analyst's call that 'the Chinese are frightening'.
Chinese EV brands combine research and design centers from the United States, Europe and China with factories.
Geely Zeekr will launch an all-electric sedan in the Netherlands this year and a SUV in Sweden. The mini-United Nations, which includes Chinese and European designers, is located in Gothenberg (Sweden), adjacent to Volvo Cars, another Geely Brand, while the factories are in China.
Spiros Fottinos, CEO of Zeekr, is a Toyota Lexus veteran. He said that with a "clear global vision", they are looking for the right opportunities in other markets.
Carlos Tavares, CEO of Stellantis (parent company of Chrysler Peugeot and FIAT), warned in January about the need for Europe to develop a strategy that would allow it to compete with China’s cheaper prices. Tavares said that European electrics are 40% more expensive than Chinese models.
Tavares said to the German magazine Automobilwoche that it was a bleak situation. But it doesn't need to be that way.
Exports of BYD Automobiles quadrupled to 55,916 sedans SUVs and hatchbacks last year. The majority of exports went to India and Thailand. BYD sold 1,000 vehicles to Mexico's VEMO last year, the largest EV taxi fleet outside China.
BAIC, the state-owned company based in Beijing, announced that a Jordanian dealer had ordered 1,000 units in January of its compact EU5 sedan. The company plans to introduce two to three additional electric vehicles in Latin America and Southeast Asia, as well as Europe.
What about the United States? It's the largest and richest market.
Chinese EV brands have a trepidation about an expansive country that requires big investments in charging networks and dealerships, particularly when Washington and Beijing are fighting over technology, security and human rights.
Li, from NIO, said: "This is no easy task." Our products and services must be ready.
BYD has been selling battery-powered buses in the U.S. for over a decade. These buses are assembled at a plant northeast of Los Angeles. The company responded to questions in writing that it is "still in the process" of deciding if it will sell SUVs and cars to Americans.
Leah stated that political tensions in the United States make it difficult for Chinese companies to launch their products, whether they are EVs or not.
Ora, a Great Wall brand, sells its 03-model in Europe starting at 140.000 yuan (about $20,000.) Ora is trying to differentiate itself from dozens of other brands that are just starting out by marketing their cars as designed specifically for women.
This is a second car or third vehicle for a family. Tan Jian, Ora's vice general manager, said that a daughter or wife could use it to commute to and from work, go out with their friends, or go shopping.
BYD Auto is partnered with several dealership chains across Europe including in Britain, Sweden Germany and the Netherlands. The company also says that it has delivered cars to Belgium, Denmark, and Austria. BYD has signed a contract with European rental company SIXT, which BYD claims will result in the sale of up to 100,000 cars over the next 6 years.
BYD plans to open 100 showrooms in Japan by 2025. The Japanese market will be receiving its Dolphin hatchback, and Seal sedan this year. The company claims to have also exported 4,000 ATTO 3s from Australia.
Furukawa’s OZ Co. transforms classic Volkswagen Beetles by replacing gasoline engines and electric motors with batteries. Furukawa says he drives the ATTO 3 daily and has driven as far as Osaka (400 kilometers, 250 miles).
BYD's Yokohama dealership, which opened on Feb. 2, was surrounded by established brands such as Toyota, Nissan BMW, Volkswagen, and Chevrolet.
One married father said that he looked at Japanese model but chose an ATTO 3, because of its price and roominess.
The buyer who requested to be identified by only his surname Ohta said, "I like the ride and it's very easy to drive." There are many features to like.
Ohta's dad had a "negative reaction" to BYD's being from China. China has a long history of having strained relations with Japan. Ohta's job as a video game developer has taught him how to respect Chinese innovations.
Ohta stated that 'they are coming out with outstanding products'. I have great respect for the country.