China-based and fast-growing BYD has expanded into the premium auto market with the launch of the first of two new luxury electric vehicles (EV) brands to be launched this year 2023.
The Luxury Line
In a media presentation on Thursday, January 5, Bloomberg reported that the Shenzhen-based automaker unveiled the U8, a sport utility vehicle that will be produced under the Yangwang brand. Without elaboration, BYD said the price of the SUV will be in the “million yuan” range.
It will be placed in the select price range among electric vehicles in China. The US Tesla Model Y SUV is currently priced at 288,900 yuan ($42,030).
BYD, funded by Warren Buffett, is quickly catching up with market leader Tesla. The company produces about 70,000 EVs per month at its Shanghai plant to increase production of its high-end EVs for high-end customers and update its existing inventory.
On the same day, BYD also introduced the U9 model. It is a high-end electric sports sedan now.
Little information is provided about the cars beyond the technical specifications.
However, BYD boasts that the U8 has four electric motors, the automaker’s signature leaf batteries, and the ability to squirt water in an emergency. BYD has already highlighted the safety standards of its new premium brand with a video showing the car in snowy weather with a flat tire.
The battery and semiconductor maker did not say where the advanced labels would be publicly available.
Despite the impact of Covid on manufacturing, BYD saw sales of its new energy vehicles, such as electric and hybrid vehicles, from about 604,000 in 2021 to 1.86 million last year.
In December last year, a senior BYD official said that production would be reduced by at least 2,000 vehicles a day and that 20-30% of workers would not be able to enter the workplace due to quarantine restrictions.
At the same time, EV sales fell month-over-month for the first time since February 2022.
The growth of the Chinese passenger car market is slowing, with sales in 2022 expected to increase by only 1.8 percent to 20.7 million. Despite this, demand for electric vehicles has remained stable. The China Passenger Car Association expects electric powered vehicle sales to reach at 8.4 million by 2023, up from an estimated 6.5 million the last year 2022.
“We expect BYD’s overseas expansion and the launch of new brands in 2023 that should add value,” said Jing Yang, director of corporate research at Fitch Ratings.
Yang emphasized that BYD is flexible because of its long backlog and reliable supply chain, according to Bloomberg.
After a 28 cline in 2022, BYD shares rose 7.9% in Hong Kong after just three trading days. After producing fewer electric cars than expected last quarter, Tesla shares fell 65% over the past year and another 12% on Tuesday, January 3.