The Chinese brand is launching its Seal U in rechargeable hybrid form. A decision more logical than it seems…
Do you remember the BYD F3DM? If it’s unknown to you, no one will blame you. This Chinese sedan with perfectly ordinary lines changed the destiny of the Shenzhen brand at the end of the 2000s.
Indeed, it was one of the first series-produced plug-in hybrid cars – around 3,000 units – three years before the sexier and more publicized Fisker Karma. Above all, its technology caught the eye of the American investor and billionaire Warren Buffett, who decided to help the young BYD company ascend with significant financial support…
Fifteen years later and now the 9th largest global automaker, BYD continues its offensive in Europe, started a year and a half ago. And this time, with a plug-in hybrid electric vehicle (PHEV). The recent Seal U will be available this summer in “plug-in hybrid” form in our market, with powertrain options and battery packs ranging from 217 to 323 hp.
“SEAL U DM-i is an efficient, practical, affordable, and environmentally friendly solution for daily mobility needs and worry-free long trips,” the Chinese group assured during the first tests of its new vehicle in Rome, Italy.
Up to now, BYD had a range of six 100% electric models on the French market. The decision to enter this segment may be surprising at a time when these vehicles have a bad reputation, especially due to the gap between homologated values and actual emissions and consumption.
BYD very PHEV
However, if we observe closely, the decision to market the Seal-U PHEV is not irrational.
Firstly, because BYD produces a lot of them in China. Our BYD Seal U – called Song Plus in the People’s Republic – sold nearly 300,000 units last year with this powertrain option, compared to less than 100,000 for its electric counterpart. This is more than all Tesla Model Y registrations in Europe…
Throughout the 2023 exercise, 48% of BYD, Denza, or Yangwang (the other group brands) registered in China were plug-in hybrids. The “home” technology named DM-i and its “sport” variant DM-p is therefore more than profitable. “More than 3 million DM powertrains are serving our customers worldwide,” emphasized Michael Shu, the head of BYD Europe during the giant’s press conference at the last Geneva Motor Show.
Secondly, it’s time to export. In 2023, over 90% of cars manufactured by BYD did not leave China. However, the fierce price war in this market is pushing manufacturers to favor exports and their potentially higher margins. After a period of euphoria – PHEV sales multiplied by six between 2019 and 2023 – the local market seems saturated.
Bringing the Song/Seal SUV, already adapted for our continent in terms of electric (homologation, crash tests, adjustments…), to Europe is not insurmountable. Currently, the customs duties amount to 10% of the vehicle’s value. The recent changes – an increase to 27% for BYD, 38% for MG – only apply to electric cars. Reverting to hybrids for the European market is therefore rational from the perspective of Shenzhen.
And this arrival allows the brand to further animate a growing network, with around thirty sales points in France today, and about sixty by the end of the year. It attracts private or professional customers who are not yet ready to switch to “all-electric”, especially at a time when the demand for electric cars is experiencing a lull. The curiosity factor linked to Euro 2024 sponsorship should help.
BYD Seal U Plug-in Hybrid: Price Advantage
Moreover, the prices are more attractive compared to competitors. For now, the prices of the Seal U DM-i in France are not definitively set. However, it will be offered in Germany starting at €38,900 (217 hp) and reaching €44,500 (323 hp).
European competitors are significantly more expensive. The 180 hp Citroën C5 Aircross plug-in hybrid is currently listed at €44,300. And the base model Volkswagen Tiguan is sold for €53,550. Ouch.
The arrival of the BYD Seal U DM-i comes at a time when demand for plug-in hybrids is on the rise again. In February, plug-in hybrid sales increased by 11.3% compared to the same month of the previous year. Fleet managers and individuals are hesitating in the face of market uncertainties, constantly distorted by state aid and manufacturers’ backtracking. Plug-in hybrids are regaining temporary favor.
As evidenced by Renault’s recent unveiling of a Rafale with a 300 hp plug-in hybrid powertrain. The 7% market share of PHEVs is therefore a strong challenge for major groups and a potential niche for newcomers like BYD.
In order to achieve rapid success as hoped by its leaders, the Shenzhen group must go where the demand from European customers lies. Otherwise, it risks not filling its famous boat or abandoning its unsold cars in major European ports.
Positioning Issue
Additionally, BYD does not intend to enter Europe only at the low end. The desire for premium and margin was quite clear at the group’s stand at the last Geneva Motor Show. The brand showcased its “elegant” Denza signature, comparable to DS, which will arrive chez with its luxury D9 van later this year, a competitor to the plush Lexus LM. In its country of origin, it is available in electric or with the same powertrain as the Seal U DM-i.
BYD also presented the Yangwang U8, labeled as the “most powerful SUV in the world” with its 1,100 horsepower. Its four electric motors demand a lot from the 49 kWh battery. It is recharged by a generator, which is a good old 4-cylinder 2-liter turbo. So, a hybrid…
The arrival of the Chinese giant on our shores will not be solely electric.