Decline in Imports: Approximately 300,000 Chinese Electric Vehicles Headed for Europe
In an attempt to boost sales and counteract local market struggles, BYD, a leading Chinese electric vehicle (EV) manufacturer, has been under fire for exporting approximately 300,000 electric cars to Europe that were temporarily registered as "used cars." This practice, known as "zero-mileage used cars," involves new EVs being registered as used vehicles without actual driving, raising concerns about subsidy fraud, safety, market distortion, and consumer trust.
The controversy stems from several interconnected issues. Firstly, automakers like BYD and dealers register brand-new EVs as used cars to claim government subsidies meant only for genuine sales. This deceptive practice inflates sales figures artificially, leading to questions about the authenticity of the manufacturer's reported success.
Secondly, these zero-mileage cars, having never been used properly, may not meet the safety standards expected for true used vehicles. Exporting them to less regulated markets, including Europe, raises safety risks for consumers unaware of the vehicles’ true condition.
Thirdly, selling these cars as used at reduced prices distorts the market by undercutting competitors and misleading buyers who expect a used vehicle to have typical wear and mileage, not a brand-new car with a suspicious registration history.
Regulatory bodies in China have expressed concern over this practice. Meetings involving BYD, other manufacturers, and industry groups were held to impose tighter controls on secondhand vehicle registration and establish lifecycle tracking systems to combat these fraudulent activities.
Competitors have also voiced their displeasure, describing BYD's move as "drinking poison to quench thirst." Experts have cautioned that extreme price cuts could put pressure on other electric car manufacturers, potentially leading to a vicious cycle in the industry.
Despite the manufacturer's success in selling electric vehicles in China, local customers have been resistant, citing numerous factors for their reluctance to purchase. As a result, BYD has faced sales declines in its home market. In response, the company aims to double its sales to 800,000 vehicles this year, with an increased focus on exporting to foreign countries, particularly Europe.
The success of BYD's sales in Europe remains uncertain, but the controversy surrounding its unconventional sales strategy has raised important questions about the ethical and regulatory challenges in China's EV market and their potential international repercussions.
[1] Source 1 [2] Source 2
[1] The deceptive practice of registering new electric vehicles as used, as controversy surrounding BYD suggests, could potentially involve misuse of government subsidies meant for genuine sales, utilizing other technology to fabricate the vehicles' histories.
[2] Regulatory bodies, in an effort to combat this fraudulent activity, have proposed tighter controls on secondhand vehicle registration and the implementation of lifecycle tracking systems, employing various technological means to detect and prevent such practices.
