By Gary S. Vasilash

Admittedly the BYD Seagull (a.k.a., “Dolphin Mini” in Brazil and Latin America) is a small car—98.4-inch wheelbase, 148.8-inch length, 67.5-inch width, 60.6-inch height—there are two other characteristics worth knowing: (1) it is an electric vehicle with a range ranging from about 190 miles to 250 miles, depending on the battery used; (2) it has a starting price that’s approximately $11,000.

Which leads to two other considerations:

• Good thing Americans don’t like small cars
• Good thing it isn’t available in the U.S. because while Americans may not like small cars, they do like low prices

And Kristin Dziczek, policy advisor, Federal Reserve Bank of Chicago, speaking at the 30^th annual Automotive Insights Symposium, speaking on her own behalf, not the Fed’s, said that a car like the Seagull is something that worries her.

Dziczek said that BYD could conceivably sell the Seagull in the U.S. market for ~$15K, including the 27.5% tariff that the U.S. imposes on vehicles built in China, and still make money.

Given that the average transaction price for an EV in the U.S. in December was $50,786 according to Kelley Blue Book, given that $48,759 was the average transaction price for vehicles of all types last month, doesn’t well under $20,000 look appealing—even for a small EV?

Let’s say that a Chinese company builds a factory in Mexico. Isn’t it possible that, increased costs compared with China, it could take advantage of the USMCA and avoid the big tariff?

While there are some who argue that people want the amenities that are characteristic of vehicles with higher price points, some people prefer porterhouses over McDonald’s.

Seems as though the traditional domestic OEMs are interested in those who want steak.

Chevy, once the GM brand that was more economical, has a starting price for the Blazer EV at $56,715. . .just $1,875 less than the starting price for the Cadillac Lyriq EV.

Remember when the Chevy Silverado EV was announced and it was said that the starting price would be around $40,000? The actual MSRP is $74,800.

Affordability is a key concern for most people. Sure, there are those who buy far beyond their means for purposes of fashion.

But fashion is fickle.

And in the short and long run for many people, it is about what will get the job done at a price that meets their means.

While politics may impede the entry of Chinese vehicles in high numbers in the American market (the Buick Envision and the Polestar 2 are built in China and you can buy one at a dealer near you right now, but the sales for both are still somewhat small: for 2023 there were 44,281 Envisions sold and 10,350 Polestar 2s) it is going to likely happen at some point.

The question is how competitive the U.S. builders are going to be when that happens. Given that they’ve pretty much abandoned midsize and small cars (Toyota sold 290,649 Camrys last year and 232,370 Corollas, so it is not like there isn’t a market for those types of vehicles), there should be some serious concern.