BYD tells EU to ‘stay away’ from tariffs as it expands European supply chain

Chinese EV giant BYD on Monday slammed the EU's planned tariffs on Chinese-made EVs but said it planned to make almost all the cars it sells in Europe locally, joining a string of Chinese carmakers accelerating plans for manufacturing in the region.

BYD, the second-largest producer of battery-electric cars globally after Tesla, plans to produce components in Europe and assemble battery packs at its European plants in Hungary and Turkey, importing only the battery cell from China, Executive Vice President Stella Li told Reuters in an interview at the Paris car show.

It is still deciding whether to pass the cost of tariffs - 17% for BYD on top of an existing tariff of 10% - onto consumers or absorb the hit, Li said, adding she did not expect BYD to be able to sell cars in Europe for under 30,000 euros ($32,745).

"We disagree a lot on the calculations... it's not a fair judgement," Li said, speaking on the sidelines of the Paris car show. "Politicians should stay away from tariffs, adding more cost to auto manufacturing and confusing the auto industry."

Also in Paris, Tianshu Xin, CEO of the Leapmotor International JV controlled by Stellantis, said the EU tariffs could impact which models the company makes in Europe at Stellantis plants, but said it was too soon to say which ones.

When asked about whether the company would pass on tariff costs to consumers, Xin said decisions were not yet finalised but the company was capable of absorbing some costs because 60% of its vehicle development is done in-house.

SUPPLY CHAIN

Asked about BYD's European manufacturing plans, Li said the company would produce almost all of its EVs in Hungary and that it would "buy the maximum from European vendors" in terms of its supply chain, as well as buying from other Chinese suppliers setting up shop in Europe.

Exports are a major part of the company's growth strategy, with assembly lines under construction around the globe from Brazil to Uzbekistan.

Asked why BYD was having a hard time in Germany, Li said: "I think we did not build the infrastructure right".

"Now we are just correcting and starting to build our network ... We need to add more service points which we have already done and more dealer networks," she said.

BYD bought its German distributor Hedin Electric Mobility in August to take greater control of sales in the German market, which totalled just over 4,000 last year but slumped to just under 1,500 in the first half of this year, in line with an industry-wide slowdown in EV demand.

"You will see the change very soon – you will see a lot of BYD cars on the street in Germany," Li said

($1 = 0.9162 euros)

(Reporting by Victoria Waldersee, Nick Carey; Editing by Mark Potter)