BYD Begins Exporting EVs From Thailand To Europe

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Here is a story about BYD and EVs that seems straightforward. BYD has a factory in Thailand and has begun exporting cars built there to Europe. The first batch of 959 BYD Dolphin electric cars manufactured at the factory in Rayong on the southern coast of Thailand is now aboard the BYD Zhengzhou on their way to markets in Germany, Belgium, and the Netherlands. The ocean voyage is expect to take 35 days. The BYD Dolphin is a direct competitor to the Volkswagen ID.3 and when you look at a picture of the car, it appears to be very similar in appearance, which is probably no accident.

Production of the Dolphin at the factory in Thailand began on July 4, 2024. That facility has an annual production capacity of up to 150,000 units and currently employs around 6,100 people. Originally, it built only right-hand drive cars for the Thai market and other ASEAN countries, but now it has begun assembling left-hand drive units for countries whose drivers drive on the “correct” side of the road. That opens the window to export opportunities, which is important for reasons that may not be obvious.

Part of the new emphasis on exports is to increase the production at the Rayong facility so it is closer to its design capability. Currently, it is producing about 60,000 units of the Dolphin as well as the Atto 3 SUV and the Seal sedan there per year — less than half of its maximum capacity.

According to The Nation, the Thai government’s EV 3.0 program provides tax incentives and subsidies to promote the sale of electric vehicles in the country. Part of that program permits cars to be imported duty free and sets the excise tax on purchases at 2% — significantly lower that the prevailing tax of 8%. It also includes purchase incentives of up to $4600 per vehicle.

All those incentives are conditioned on the manufacturer producing a certain number of cars domestically to offset the number of cars it imports. According to Electrive, the offset ratio requires one locally produced car for every imported car in 2024. Although EV sales in Thailand have risen sharply — new registrations in the first seven months of this year were up more than 50% to 66,000 units — the scale of BYD’s offset obligation means domestic sales alone cannot balance its import volumes.

The program has now been amended to allow more flexibility, including the option to count exports as part of the offset quota at a rate of 1.5 times. The change provides BYD with much needed relief, as it has struggled to meet the requirement with domestic sales alone.

With four months remaining in the program, the company still needs to produce nearly 20,000 vehicles. BYD is Thailand’s leading EV brand and the country’s fourth largest carmaker overall, with an 8% market share. Under the government program, it must produce about 30,000 units to offset imports under EV 3.0.

“Allowing exports to be counted as production offsets is an effective approach,” a BYD executive said. “If we couldn’t export, all units would have to be sold domestically, intensifying competition and distorting the market structure.” It also means the Thai government does not have to pay the $4600 EV subsidy on cars exported to other countries.

Exporting EVs from Thailand to Europe also has other benefits, namely that BYD can bypass special tariffs the EU imposes on EVs made in China. Other carmakers, such as SAIC/MG, are also looking into exporting vehicles from Thailand to Europe instead of from China.

BYD Expanding Globally

BYD continues to go from strength to strength. As Zachary Shahan wrote earlier this week, “Probably one of the more interesting things to watch as BYD expands its sales globally is where the company decides to build more factories. One of those places is Malaysia. This is not a full factory, but a CKD (completely knocked down) assembly plant that BYD is building there. The first cars assembled at the plant will roll of the production lines there next year (2026).”

“Malaysia has always been one of BYD’s most important markets in Southeast Asia, and today’s dual announcement of CKD and the New BYD SEAL marks a new chapter in our journey here,” Liu Xue Liang, general manager of auto sales for BYD Asia-Pacific, noted at the launch of the new BYD Seal there.

Zachary added, “BYD currently has 7 stores in Cambodia as well as one service center. By the end of the year, the company aims to have 13 stores and 6 service centers. BYD is also building a vehicle assembly plant in Cambodia, which is supposed to go into operation by the end of the year as well and be able to produce 10,000 vehicles a year. That’s a drop in the bucket compared to BYD’s overall sales, but every little bit counts, and as we’re seeing, BYD is doing this kind of thing in market after market.”

The company is rapidly becoming the dominant EV (and PHEV) manufacturer in the world and expanding its manufacturing capability to several countries such as Hungary, with a proposed factory in Turkey also in the planning stages. It really seems to have a crystal ball when it comes to managing the myriad policy considerations that are part and parcel of doing business internationally.

If there are tariff barriers in one country, find a way to either build your cars in that country or in other countries that have more favorable trade relations. Rules change frequently, so being nimble and able to adapt rapidly to changes in the regulatory environment are essential. BYD is now selling its vehicles successfully in Europe — a market that GM all but abandoned several years ago and one that Ford is struggling with despite building cars there for decades.

Part of that is attributable to BYD having a cost advantage over its European rivals, but part of it is also offering good value for the money to customers in Europe. The Yugo was cheap but it was not a good value, which lead to its sales trajectory in the US flaming out in less that two years.

BYD does not intend to repeat that mistake. In fact, so far this year, its sales trajectory has been up strongly, while Tesla’s trajectory, particularly in China, has been down month after month. If you are looking for a glimpse of the EV future, look at what BYD is doing. Everything it does is coming up roses and there is no reason to think that trend will end any time soon.