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Jun 14, 2024, 12:41pm EDT
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Semafor Signals

The Euros are propelling China’s BYD in the face of European tariffs

Insights from Sh:z, the Central European Institute of Asian Studies, and WeChat’s Xiǎomāo Xīnlán Liáo Chē


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REUTERS/John Sibley
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The News

Chinese electric vehicle giant BYD is the official sponsor of the UEFA European Championships starting Friday, days after Brussels hit Beijing with tariffs on Chinese EVs. The move cements the Tesla rival’s firm grip on the European market.

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SIGNALS

Semafor Signals: Global insights on today's biggest stories.

The Euros are key for BYD’s long-term success

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Sources:  
Sh:z, Central European Institute of Asian Studies

Germany’s Volkswagen, which has sponsored the Euros from 2018 to 2022, declined this year citing “cost discipline.” VW is already “considered the German car brand” in the country, a brand researcher told Sh:z, and doesn’t need more publicity, whereas BYD — despite making big gains in Europe — is willing to spend millions on advertising because it “lacks awareness and acceptance in Germany.” But it’s still too early and “difficult to determine” whether the Chinese EV maker will win over Germans, China analyst Sebestyén Hompot told Semafor.

BYD sees itself as catalyst of new Chinese soccer wave

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Sources:  
The New York Times, Xiǎomāo Xīnlán Liáo Chē

Beijing’s hopes to become a soccer superpower failed over a series of bad business deals and alleged corruption that collapsed several clubs and left international players without paychecks. But BYD believes it can change China’s soccer fortunes by mobilizing a new, younger generation of Chinese players, according to Xiǎomāo Xīnlán Liáo Chē, a WeChat blog about China’s auto industry. BYD invited more than 100 top teenage soccer players from across the country to watch the Euros kick-off at its Shenzhen headquarters, and organized friendly matches with European youth clubs. “Going global is the only way for Chinese football and Chinese cars to become stronger,” the blog wrote.

BYD could emerge unscathed from EU tariffs

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Sources:  
CNN, Semafor

There’s “still space for [BYD] to grow in Europe” despite the bloc’s latest tariffs on Chinese EVs, CNN reported. Brussels hit BYD with ​​a 17.4% levy on battery-powered vehicles — the lowest among Chinese EV-makers — which means that it can further slash prices to remain competitive among European EV makers, according to a Rhodium Group analysis. (Only a 40% to 50% tax could make a dent on BYD’s European profits, but a tax that high would violate World Trade Organization rules, Semafor previously reported.) BYD’s production expansion in Hungary and its diversification to plug-in hybrids means that it can circumvent some tariffs, CNN wrote, unlike other Chinese EV makers like state-owned SAIC, for whom the tariffs are “disastrous.”

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