From its inception, Chinese automaker BYD has had a global vision that’s been realised in Asia, Europe, and South America, but the company has had a conspicuously low profile in the U.S., where 25%import duties have so far kept the brand mostly out of the market. Indeed, U.S. lawmakers are urging even higher tariffs on Chinese-made EVs.
The U.S. blockade hasn’t stopped BYD (“Build Your Dreams”) from becoming the world’s biggest producer of EVs, passing Tesla. The company produced 3 million vehicles last year, with exports to 70 countries growing by a remarkable 334%. The company’s website has headlines such as “BYD Seal Launched in Nepal” and “BYD Enters Indonesian Passenger Car Market with three EVs.” Early investment in BYD by Warren Buffett seems to have been rewarded, though he sold some of his stock in 2022.
The EV supercar market has entries such as the Rimac Nevera, Lucid Air Sapphire, Maserati GranTurismo Folgore, and others, but few credible models from China. Now that may be changing with BYD’s sleek two-door US$233,400 Yangwang U9 (“Ultimate 9”) coupe, so far intended only for the Chinese market.
Competitive with those other supercars, it can reach 62 miles per hour in 2.36 seconds and attain a top speed of 192 mph. The U9 has 1,287 horsepower and 1,200 pound-feet of torque. The car was shown in a live launch stream from Shanghai on Saturday, and will reportedly reach customers as early as this summer.
The U9 has an 80-kilowatt-hour lithium iron phosphate, or LFP, battery and 280-mile range on the Chinese Light-Duty Vehicle Test Cycle, which Sam Abuelsamid, principal analyst for transportation and mobility at Guidehouse Insights, says is “notoriously optimistic.” The U9 has an 800-volt architecture and can reportedly use DC fast charging up to 500 kilowatts, with the ability to charge from 30% to 80% in 10 minutes.
The U9 has familiar supercar styling by the German designer Wolfgang Egger, complete with a pair of upswinging doors. Like other Chinese cars, it has its fanciful side—including four different “dance modes” that make use of its Discus X full active body control. In the event of a flat tire, it can run on three wheels. Other features include an adjustable rear wing and “the smartest supercar cockpit,” with two LCD screens (and provisions for a possible third). The U9 is around 16 feet long, roughly the size of a Lamborghini Aventador.
Yangwang is a new upmarket brand for BYD. The lineup includes the U8, a US$150,000 four-motor plug-in hybrid SUV with 1,184 horsepower and zero to 62 in 3.6 seconds. The U8 can reportedly stay afloat during emergencies. BYD has already delivered more than 3,000 of them. The U7 is a luxury electric four-door sedan, also with four motors, and a reported 1,300 horsepower and up to 500-mile range. The U7 starts at US$140,000.
BYD covers both ends of the market, and offers EVs that sell for less than US$14,000 in the Chinese market. BYD, which has sold some buses in the U.S., is considering production in Mexico, which would potentially be an easy export to the U.S. That prospect is alarming Western automakers. According to a recent report from the Alliance for American Manufacturing: “The introduction of cheap Chinese autos—which are so inexpensive because they are backed with the power and funding of the Chinese government—to the American market could end up being an extinction-level event for the U.S. auto sector.”
Building Chinese cars in Mexico is “an effort to gain backdoor access to American consumers by circumventing existing policies that are keeping China’s autos out of the U.S. market,” the report said. Abuelsamid said that further tariffs are “a distinct possibility,” but not likely until at least 2025 because of Congressional gridlock.
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New research suggests spending 40 percent of household income on loan repayments is the new normal
Requiring more than 30 percent of household income to service a home loan has long been considered the benchmark for ‘housing stress’. Yet research shows it is becoming the new normal. The 2024 ANZ CoreLogic Housing Affordability Report reveals home loans on only 17 percent of homes are ‘serviceable’ if serviceability is limited to 30 percent of the median national household income.
Based on 40 percent of household income, just 37 percent of properties would be serviceable on a mortgage covering 80 percent of the purchase price. ANZ CoreLogic suggest 40 may be the new 30 when it comes to home loan serviceability. “Looking ahead, there is little prospect for the mortgage serviceability indicator to move back into the 30 percent range any time soon,” says the report.
“This is because the cash rate is not expected to be cut until late 2024, and home values have continued to rise, even amid relatively high interest rate settings.” ANZ CoreLogic estimate that home loan rates would have to fall to about 4.7 percent to bring serviceability under 40 percent.
CoreLogic has broken down the actual household income required to service a home loan on a 6.27 percent interest rate for an 80 percent loan based on current median house and unit values in each capital city. As expected, affordability is worst in the most expensive property market, Sydney.
Sydney
Sydney’s median house price is $1,414,229 and the median unit price is $839,344.
Based on 40 percent serviceability, households need a total income of $211,456 to afford a home loan for a house and $125,499 for a unit. The city’s actual median household income is $120,554.
Melbourne
Melbourne’s median house price is $935,049 and the median apartment price is $612,906.
Based on 40 percent serviceability, households need a total income of $139,809 to afford a home loan for a house and $91,642 for a unit. The city’s actual median household income is $110,324.
Brisbane
Brisbane’s median house price is $909,988 and the median unit price is $587,793.
Based on 40 percent serviceability, households need a total income of $136,062 to afford a home loan for a house and $87,887 for a unit. The city’s actual median household income is $107,243.
Adelaide
Adelaide’s median house price is $785,971 and the median apartment price is $504,799.
Based on 40 percent serviceability, households need a total income of $117,519 to afford a home loan for a house and $75,478 for a unit. The city’s actual median household income is $89,806.
Perth
Perth’s median house price is $735,276 and the median unit price is $495,360.
Based on 40 percent serviceability, households need a total income of $109,939 to afford a home loan for a house and $74,066 for a unit. The city’s actual median household income is $108,057.
Hobart
Hobart’s median house price is $692,951 and the median apartment price is $522,258.
Based on 40 percent serviceability, households need a total income of $103,610 to afford a home loan for a house and $78,088 for a unit. The city’s actual median household income is $89,515.
Darwin
Darwin’s median house price is $573,498 and the median unit price is $367,716.
Based on 40 percent serviceability, households need a total income of $85,750 to afford a home loan for a house and $54,981 for a unit. The city’s actual median household income is $126,193.
Canberra
Canberra’s median house price is $964,136 and the median apartment price is $585,057.
Based on 40 percent serviceability, households need a total income of $144,158 to afford a home loan for a house and $87,478 for a unit. The city’s actual median household income is $137,760.
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