Chinese cars are sold in Brazil for triple the price sold in China and Europe

Chinese cars, despite being much cheaper than similar models from traditional brands, have much higher prices outside of China than in their country of origin. A report from Reuters highlights this discrepancy. For example, the models of BYD prices vary between 30% and 178% higher than in China, costing almost triple.

In Brazil, the best-known modeling duo is Dolphin and the Dolphin Mini (the latter called Seagull abroad). O Dolphin Minisold in China for less than R$50,000, costs R$115,000 here, representing a 130% increase compared to the local price.

The objective of BYDaccording to Reuters, is to seek greater profits abroad, as competition in China is intense. O Dolphinolder brother of Dolphin Mini, costs around R$149,800 in Brazil, while in China it costs approximately R$84,000, resulting in a price increase of 78% in the Brazilian market. In Europe, the situation is even worse, with the same model costing around R$190,000 in Germany.

Part of this price increase in Brazil is due to import taxes, which will be charged again in 2024 for electric cars imported from other countries. However, the final price is always determined by what the market is willing to pay.

Imagine the profits of BYD when selling the Dolphin for R$150,000 in 2023, without paying import taxes. This makes us understand that R$50,000 for a Dolphin Mini or R$84,000 for one Dolphin it would be “leaving a lot of money on the table”.

A compact electric crossover from BYDcalled Act 3costs 19,200 dollars in China, but in Germany it is sold for 42,700 dollars, still being competitive with other electric cars on the market.

These expressive profit margins BYD in markets outside China they are rare. They also highlight the competitive advantages that China has in selling electric cars. The country has managed to reduce costs at all stages of production, from raw materials to batteries, labor and land to build factories. More than a third of car sales in China are already electric vehicles.

In 2024, no fewer than 110 new electric models will be launched in China, most of them from Chinese brands. The substantial profits of BYD allow the company to reduce part of these profits in some countries, seeking to capture a larger share of the market.

However, in Brazil, we still cannot expect the BYD offer prices as competitive as in China. The quality of the models may not be excellent, but it is better than the negative impression we had 10 or 15 years ago when everything from China was seen as extremely low quality.