A battle over electric vehicles (EVs) is unfolding in China, with officials at rival brands BYD and Huawei exchanging some verbal barbs. Huawei recently acknowledged the ultra-low prices of BYD’s EVs, insinuating that these low costs come at the expense of other features.
“We are not good at competing with ultra-low prices,” Yu Chengdong, the chairman of Huawei’s smart car unit, reportedly said at a public forum in Shenzhen. “Rather, we are good at competing with value, intelligence, luxury, comfort, safety, high quality, excellent and comfortable user experience.”
BYD quickly responded to the criticism, challenging Huawei to a direct comparison of their vehicles and going on to suggest a joint showcase of the two companies products. A representative from BYD invited Huawei to present their cars side-by-side, allowing consumers to judge which is superior.
“Personally I have great respect for Huawei,” said Li Yunfei, general manager of branding and public relations at BYD, in a video post on Weibo. “But, I feel that if Mr. Yu can make fewer comparisons, either at press conferences or public forums, more people will like him, and Huawei’s brand would also gain points. We welcome other brands to show their cars at our booth and compete with ours on the same stage.”
In the midst of this corporate skirmish, BYD also took aim at the U.S. and European auto industries. These comments follow the tariff hike imposed by the U.S. on Chinese EVs, raising the duty to 100%. Europe is expected to soon follow suit with its own rate hike. BYD’s top executive argued that these moves stem from fears that Chinese EVs might outperform their Western counterparts.
“There are many examples of politicians in other countries who are worried about EVs in China,” Wang Chuanfu, CEO of BYD, said at a recent industry event. “If you are not strong enough, they will not be afraid of you.”
This exchange comes amid the ongoing price competition among Chinese automakers. The drive to offer the cheapest EVs has led to a reduction in profit margins across the industry. The average profit margin for China’s auto sector has dropped to 5%, the lowest in at least a decade, as domestic brands aggressively vie to outdo each other.