China’s BYD has started exporting electric cars from its Thai factory to Europe. In anticipation of the start of its production site in Hungary, the Chinese EV maker uses this bypass to skip its 17.4% excess tariffs.
As products imported from Thailand into the EU are exempt from import levies, the new route is expected to have a positive impact on BYD’s bookkeeping. Will customers also benefit?
Nearly 1,000 of BYD’s compact Dolphin hatchbacks left Thailand this week aboard the company’s own carrier ship, the BYD Zhengzhou, which is making its first journey from Southeast Asia to Europe. The cars are bound for Germany, Belgium, and the Netherlands. It’s a milestone, as it’s the first time BYD has supplied Europe with vehicles assembled outside China.
Lowest threshold
The shipments come from a plant in Rayong province that opened just over a year ago. The factory has the capacity to produce 150,000 vehicles annually and currently employs more than 6,000 people.
Initially, BYD intended the site to supply exclusively Thailand and neighbouring markets in the Asia-Pacific region. Still, as duty schemes with Europe evolved, the carmaker expanded to produce left-hand-drive cars as well.
Last year, the EU imposed its anti-subsidy tariffs on Chinese EV makers. The Beijing incentive has increasingly favored BYD over the years. Still, due to its exemplary cooperation with the European administration, it was subject to a 17.4% duty in addition to Europe’s standard 10% car import tax.
That’s the lowest threshold imposed. But better none than low. Vehicles built in Thailand are exempt from those penalties, giving the company a crucial cost advantage at a time when affordability is becoming a key battleground in the EV market.
However, customers won’t notice the change in their pocket. “BYD already absorbs the import levies, so pricing is expected to remain the same,” comments spokesperson for BYD Belgium Thomas De Meuter. The Dolphin currently costs 29,000 euros. The new export scheme benefits BYD’s profitability only.
Slowing growth?
In that sense, Thailand has further sweetened the deal with its EV 3.0 scheme, which offers tax breaks and subsidies to encourage local electric vehicle (EV) manufacturing.
The program reduces excise tax to 2% and provides direct subsidies worth up to 150,000 baht (circa €2,700) per car, provided automakers offset their imports with domestic production.
Executives admit that exporting is essential to balancing the books. As Thailand’s best-selling EV brand – and the country’s fourth-largest carmaker overall – BYD must produce about 30,000 vehicles locally to meet its commitments under the scheme by the end of 2025.
Without exports, it would risk oversupply. For Thailand, exports of electric cars remain relatively small, but they are expected to rise sharply as the scheme nears its 2025 expiry date.
Globally, BYD’s growth remains strong, though it is beginning to slow. The company sold 2.46 million passenger vehicles in the first seven months of this year, representing a 26% increase from the same period in 2024. Overseas sales more than doubled, underscoring the company’s reliance on foreign markets as competition in China becomes fiercer.
