Small, well-built Chinese EV called the Seagull poses a big threat to the U.S. auto industry

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A tiny, low-priced electric car called the Seagull has American automakers and politicians trembling.

The Seagull electric vehicle from Chinese automaker BYD is displayed at a showroom in Beijing, Wednesday, April 10, 2024.

U.S. politicians and manufacturers already see Chinese EVs as a serious threat. The Biden administration on Tuesday is expected to announce 100 per cent tariffs on electric vehicles imported from China, saying they pose a threat to U.S. jobs and national security. Inside a huge garage near Detroit, a company called Caresoft Global tore apart a Seagull that its China office purchased and shipped to the U.S.

Higher U.S. labor costs are a part of the equation. BYD also can keep costs down because of its battery-making expertise — largely lithium iron phosphate chemistry used in consumer products. The batteries cost less but have lower range than most current lithium-ion batteries.BYD also makes many of its own parts, including electric motors, dashboards, and bodies, using its huge scale — 3 million vehicles sold worldwide last year — for cost savings.

So Detroit needs to quickly re-learn a lot of design and engineering to keep up while shedding practices from a century of building vehicles, Woychowski said. BYD would have to modify its cars to meet U.S. safety standards, which are more stringent than in China. Woychowski says Caresoft hasn't done crash tests, but he estimated that would add $2,700 to the cost.

The company isn’t selling cars in the U.S. largely due to 27.5 per cent tariffs on the sale price of Chinese vehicles when they arrive. Donald Trump slapped on the bulk of the tariff, 25 per cent, when he was president, and it was kept in place under Joe Biden. Trump contends that the rise of EVs backed by Biden will cost U.S. factory jobs, sending the work to China.

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