Europe wants its own Tesla Model 2 for €15,000 to take on the €20,000 BYD Seagull
The European Commission is setting out to build a veritable Tesla Model 2 competitor to fight the onslaught of cheap Chinese electric cars that are inundating its common market.
The world's biggest EV maker BYD just announced that its plans to start making its most affordable vehicle in Europe remain on track for later this year. So far, it has been importing the BYD Seagull under the name Dolphin Surf in Europe, but since it is a subject of significant tariffs, producing it locally could make it even cheaper.
The BYD Dolphin Surf starts from what Tesla was planning to charge for its deprecated Model 2 project after federal subsidies, or less than $25,000. If BYD circumvents tariffs with local production and the Dolphin Surf goes further down in price, it will be a formidable competitor for whatever EU's newly minted Small Affordable Cars initiative may come up with.
The EC President Ursula von der Leyen announced in the State of the European Union address that the Commission will work with the local automotive industry to develop a cheap city EV that won't depend on the Chinese supply chain.
This seems to jibe with what the Stellantis and Renault CEOs were offering earlier this year. They asked that the European Commission relax some of its automotive regulations to allow for a profitable small urban car that will cost around €15,000. That's what the new Small Affordable Cars project seems to be going after, according to the State of the Union speech:
I believe Europe should have its own E-car. E for environmental – clean, efficient and lightweight. E for economical – affordable for people. E for European – built here in Europe with European supply chains. Because we cannot let China and others conquer this market.
It remains to be seen what safety and other regulations can Europe compromise with in order to build an electric car for the masses. The harder part, though, will be to develop a localized supply chain around it, especially considering that the bulk of LFP batteries come from China. These are used anywhere, from cars and energy storage projects, down to popular mobile battery packs like the 25,000 mAh Anker Laptop Power Bank.
CATL is building a battery factory in Europe and will start making LFP packs optimized for the local market that offer either long range, or fast charging, but whether the Small Affordable Cars initiative will consider these part of a European supply chain remains to be seen.
