There are simply too many hurdles for BYD to overcome right now.

Beyond Your Dreams, more commonly known as the Chinese automotive giant BYD, was reportedly going to announce its US launch at the Consumer Electronics Show (CES) earlier this month. That announcement never happened, and now we know why. Automotive News spoke to four sources with intimate knowledge of the situation, and a US entry hasn't been ruled out entirely.

BYD still attended CES and has an American website hosting all the latest model news. Several BYD models are already available in Europe, and consumers are being won over by relatively affordable cars loaded with features and a respectable safety rating. And let's not forget a diversity of products with striking designs.

industry news, tesla's biggest threat hits pause on plans to sell cars in the usa
BYD
industry news, tesla's biggest threat hits pause on plans to sell cars in the usa
BYD Global/YouTube
industry news, tesla's biggest threat hits pause on plans to sell cars in the usa
BYD
industry news, tesla's biggest threat hits pause on plans to sell cars in the usa
BYD

The US market will be more of a challenge. According to the sources, there are several reasons why the original plan was scrapped and why BYDs won't be sold in the USA anytime soon.

The main reasons are the new Inflation Reduction Act – put in place to reduce America's reliance on Chinese-built EV batteries – and a growing anti-China sentiment in the USA.

“BYD is taking a cautious approach to the US,” a source familiar with the matter said. “Think about all the US-China political tensions and then think about the craziness of the whole world now. You don't want to jump into a big mess.”

Under the IRA, EV buyers will receive up to $7,500 in tax credits. Half of that is available if the vehicle's final assembly happens in the States, and the other half if more than 40% of the battery's components come from within the USA or one of the countries with which it has a free-trade agreement.

“Who would start selling cars with a $7,500 disadvantage?” said one of the sources.

industry news, tesla's biggest threat hits pause on plans to sell cars in the usa
BYD
industry news, tesla's biggest threat hits pause on plans to sell cars in the usa
BYD

BYD was quite far into the process before hitting pause. It spent most of last year conducting studies, finding out how to set up a distribution network on American soil. According to the sources, BYD even hired a Detroit-based consultancy firm to calculate how many dealers it would need and what these dealers should look like.

Despite the Inflation Reduction Act, changing opinions would have been a real challenge. Unlike most of its rivals in China, BYD is not state-owned. In fact, its biggest shareholder is Warren Buffett's Berkshire Hathaway, based in the US.

BYD is also the only manufacturer to really make a dent in Tesla's sales figures, and it has an ongoing partnership with Toyota. Together, they build the new bZ3X, based on the same platform as the Toyota bZ4X.

BYD is unlike any other Chinese automaker, but it may take a long time for prejudiced Americans to realize that.

industry news, tesla's biggest threat hits pause on plans to sell cars in the usa
BYD Global/YouTube
industry news, tesla's biggest threat hits pause on plans to sell cars in the usa
BYD

Source Credits: Automotive News

Keyword: Tesla's Biggest Threat Hits Pause On Plans To Sell Cars In The USA

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