BYD's Low-Cost EVs Stun Japan: Disassembly of Atto3 Sparks Industry "Shock"

BYD's Low-Cost EVs Stun Japan: Disassembly of Atto3 Sparks Industry "Shock"October 23: Japan is studying how Chinese EV makers like BYD are able to produce electric vehicles at such low costs. Following the recent disassembly of BYD's Atto3 pure electric SUV at an EV symposium in Japan, participants couldn't help but wonder: "How is the production cost so low?" The Atto3 was BYD's first all-electric car launched in the Japanese market in January 2023

BYD's Low-Cost EVs Stun Japan: Disassembly of Atto3 Sparks Industry "Shock"

October 23: Japan is studying how Chinese EV makers like BYD are able to produce electric vehicles at such low costs. Following the recent disassembly of BYD's Atto3 pure electric SUV at an EV symposium in Japan, participants couldn't help but wonder: "How is the production cost so low?"

The Atto3 was BYD's first all-electric car launched in the Japanese market in January 2023. The electric SUV starts at around $30,000 (4.4 million). BYD subsequently introduced two more popular EVs in Japan: the Dolphin and Seal, priced at $24,500 (3.63 million) and $33,000 (5.28 million) respectively. In late June, BYD launched the Seal, an all-electric sedan considered a competitor to Tesla's EVs. By August, it had become the best-selling imported EV in the Japanese market.

Now, Japan is investigating how BYD and other Chinese EV manufacturers are able to produce cars at such low costs. Earlier this month, the Chubu Economic Industry Bureau held a symposium focusing on the trends of pure electric vehicles. Over 70 Japanese automotive parts companies participated, showcasing 90,000 components from 16 foreign EVs.

Atto3 Shocks Japanese Industry

The Atto3, along with the NIO ET5 and Tesla Model Y, were among the models on display, but BYD's electric SUV grabbed the most attention. Participants inquired, "How can the production cost be so low?" Like many of BYD's models, the Atto3 starts at less than $20,000 (140,000) in the Chinese market. The cheapest BYD electric car, the Seagull, starts at less than $10,000 (69,800) in the domestic market.

BYD is able to produce cars at such low costs because it manufactures the vast majority of its components in-house. As a battery manufacturer, BYD enjoys a significant advantage in battery supply. According to relevant data, BYD is the world's second-largest EV battery manufacturer. In the first nine months of 2024, BYD held a 16.4% share of the global EV battery market, second only to CATL's 37.1%. Battery costs can account for more than a third of the total cost of an electric car, but BYD practically manufactures all of its car components in-house.

Advantages Over Competitors

For instance, almost all of the components on the Dolphin EV, except for the windows and tires, are manufactured by BYD. In the Japanese market, the Dolphin is a competitor to Toyota's best-selling Prius and Nissan's LEAF. BYD has also integrated multiple components, such as the E-Axle that combines eight parts including the motor, inverter, and reducer, effectively reducing costs.

Sho Kato, head of the Nisshin Seiki department who attended the event, stated: "I was surprised by the small number of parts used by BYD and Tesla." Kato also indicated, "Our company also hopes to leverage experience from existing businesses to enter the EV field."

The Japan Electric Vehicle Showcase Center opened in March 2022 and has attracted over 450 companies to date. New models, including the Hyundai IONIQ6, will be added by the end of October.

Currently, Japanese automakers like Toyota are lagging in their transition to pure electric vehicles. In the first eight months of 2024, Toyota sold nearly 6.6 million vehicles, of which only 97,058 were pure electric cars, accounting for less than 1.5%. However, Toyota has pledged that new technologies like advanced new batteries and a new generation of electric vehicle platforms will drive its accelerated transformation.

After dominating the Chinese market, BYD is looking to overseas markets like Japan for further growth. In the second quarter of this year, BYD's car sales surpassed those of Nissan and Honda for the first time. Since then, BYD's momentum has continued to strengthen, with sales hitting a record high for the fourth consecutive month in September.