Will BYD’s Electric Cars Destroy Europe’s Auto Industry?

Mark O'Neill July 04, 2025 17:41

Uber driver Mohammad Lucky navigates his South Korean KIA car through the crowded traffic of central London. “This is an electric car (EVs). I liked it enough to spend 700 pounds on my own charger at home – expensive but something that will give me a big return over the long term. I have heard of BYD’s Dolphin Surf but have not driven one. If the BYD cars are good enough, I would drive one.”

The European Union and U.K. have decreed that EV sales shall reach about 80 per cent of all new sedan and SUV sales by 2030, and 100 per cent by 2030, with big penalties for manufacturers that fail to reach the targets. In April, for the first time, BYD sold more EVs in Europe than Tesla, the long-time market leader. It sold 7,231 vehicles, against 7,165 for Tesla, according to market research firm JATO Dynamics.

"This is a watershed moment for Europe's car market, particularly when you consider that Tesla has led the European BEV market for years, while BYD only officially began operations beyond Norway and the Netherlands in late 2022," JATO Dynamics' global analyst Felipe Munoz said. Battery Electric Vehicle registrations surged 28 per cent in April from last year, largely driven by Chinese car brands.

On May 21, Stella Li, executive vice-president of BYD, launched the Delphin Surf, its newest model in Europe, at a grand ceremony in one of Rome’s biggest soccer stadia. It was attended by nearly 1,000 people. It held a simultaneous launch in capitals across the continent. It is its 10th model available in Europe. It sells for between 22,990 euros (US$26,100) for a 322-kilometre (200-mile) range to 24,990 euros for a 507-kilometre range.

The new car puts increasing pressure on European automakers to offer more affordable alternatives, with cost still a major barrier to wider adoption of EVs. Only a few models, such as the Dacia Spring or Leapmotor's T03, are on sale in Europe for under 20,000 euros. "The compact segment is the next frontier for electrification in Europe," Maria Grazia Davino, BYD regional managing director for markets including Germany, said. "We think this market has huge potential."

In China, the Dolphin Surf is sold as the Seagull. In 2024, it had 442,000 registrations, ranking second to Tesla’s Model Y. Globally, sales of the model in the first five months of 2025 rose 45 per cent compared the year-earlier period to 170,000, BYD said. In 2025, the company surpassed Tesla as the world's largest EV manufacturer. It is overhauling its European operations through widening its dealer network, offering more hybrids and hiring managers with local experience.

London Uber drivers said many people still preferred petrol-driven cars because of the long time needed to charge EVs and the fact that they could only driver a limited mileage after a single recharging. “EVs are all right if you are simply taking passengers around London,” said David Abraham, a Uber driver. “But I cannot take a client on a long driver. EVs need quicker changers and long driving times.”

William Gould, a retired school headmaster, drives a Hyundai EV and heats his house with Chinese solar panels on his roof. “I am happy with my Hyundai. BYD has much to do to establish itself in U.K. It must set up dealers and warehouses with parts and components, like Toyota and Honda, so that people are confident that they can get repairs done quickly. Also few people know the brand -- what does BYD stand for? It takes time to establish a reputation like the Japanese and South Korean cars.

“Another obstacle to BYD is the size and importance of the European auto industry. It employs 13.8 million people, six per cent of the total workforce. European governments cannot allow them to be taken over by Chinese or other foreign companies,” he said.

BYD will produce the Dolphin Surf at a new factory in Szeged, Hungary that is due to begin production at the end of 2025. In April 2016, it built its first European plant, to assemble electric buses in Komarom, also in Hungary. Since Hungary is a member of the EU, the products of these factories have direct access to all the countries of the EU.

One shadow threatens BYD’s breakaway expansion – ballooning debt. Last month Bloomberg quoted accounting consultancy GMT Research as saying that the company’s net debt was close to 323 billion yuan, more than 10 times the level of 27.7 billion yuan published by the company at the end of June 2024.

This is a result of the ferocious competition in the domestic EV market where too many companies cut prices to try to maintain market share and state banks are willing to provide credit to companies in this sector, considered a priority by the central government. It is one of the strategic industries outlined in the China 2025 plan. Today China’s EV industry is using less than half its production capacity.

“In China, there is a lack of demand and extreme price cutting,” said John Murphy, a senior automotive analyst at Bank of America Corp. “Eventually there will be massive consolidation to soak up the excess capacity.”

Mark O'Neill

A Hong Kong-based writer, teacher and speaker.