BYD’s EV sales in Germany and the UK skyrocketed 750% year-over-year in Q2 2024, driven by competitive pricing and strategic model launches, despite the end of German subsidies.
Chinese automaker BYD has reported a staggering 750% year-over-year increase in electric vehicle sales across Germany and the UK during the second quarter of 2024. This remarkable growth comes despite Germany’s cancellation of EV subsidies in December 2023, showcasing BYD’s ability to compete on price and technology in Europe’s challenging automotive market.
BYD’s European offensive gains momentum
BYD’s European expansion is hitting high gear, with sales increasing sevenfold compared to the same period last year. The automaker’s strategy combines aggressive pricing with carefully targeted model launches, including the recently introduced Seal U SUV in Germany. Priced at €42,000, this plug-in hybrid electric vehicle (PHEV) offers a 62-mile electric range alongside a 1.5L combustion engine – a combination specifically designed for European market preferences.
Price leadership despite subsidy cuts
While Germany ended its EV subsidy program in December 2023, causing the country’s overall EV market share to drop to 12.4% in June 2024, BYD managed to grow its sales by 22% month-over-month according to KBA data. This achievement highlights the company’s cost advantages, particularly evident with the upcoming launch of the Dolphin Mini (known as Seagull in China) in Spain at just €19,990 – significantly undercutting competitors like Renault’s Zoe by 18%.
EU probe and strategic countermeasures
The European Union’s ongoing anti-subsidy investigation revealed in its June 2024 interim report that BYD allegedly benefited from 17-28% unfair advantages through Chinese government support. Investigators confirmed BYD received €736 million in direct subsidies from the Shenzhen government between 2018 and 2023. Anticipating potential tariffs, BYD broke ground on a new manufacturing plant in Szeged, Hungary on June 28. The facility, scheduled to become operational in 2026, will have an annual production capacity of 200,000 vehicles and qualify for Hungary’s new €9,000 EV purchase incentives.
Industry reactions and market implications
BYD’s rapid growth has sent shockwaves through the European automotive industry. Stellantis CEO Carlos Tavares warned of an ‘industrial massacre’ from Chinese EV competition during his appearance at Paris Auto Week. The comment reflects growing concern among legacy automakers about BYD’s unique ability to simultaneously launch premium and budget models – a capability enabled by its vertical integration spanning the entire battery supply chain from raw materials to finished products.
This vertical integration gives BYD unprecedented control over costs and production timelines. While European automakers typically rely on complex supplier networks, BYD’s ‘mine-to-megawatt’ approach allows for faster innovation cycles and more aggressive pricing strategies. Industry analysts suggest this advantage could force European manufacturers to reconsider their mass-market EV ambitions, potentially retreating to premium segments where brand loyalty remains stronger.
The last major disruption of this scale in the European automotive market occurred in the 1980s when Japanese manufacturers entered the market. Similar to BYD’s current strategy, Japanese automakers initially competed on price and reliability before moving upmarket. However, BYD’s technological lead in battery technology and production scale may make this transition even more challenging for European incumbents to counter.
