BYD plots new hybrids but there’s a catch

BYD is plotting a range of new hybrid versions of its smallest cars, but in a strange twist there’s a good reason they might not make it to Australia.

Our market has been a prime hunting ground for BYD’s range of rival-smashing affordable plug-in and fully electric models, but a range of smaller plug-in hybrids based on the just-launched Atto 2 small SUV and Atto 1 hatch will be targeted exclusively in Europe.

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According to the brand’s vice-president Stella Li, who didn’t confirm details of the upcoming plug-in hybrids, the new models won’t be tweaked Chinese market cars, but cars designed specifically for the European market.

Autocar quotes Li as saying there isn’t a market in China for such small hybrid cars, with almost all being fully electric.

The new Euro-specific BYD models will be built at the brand’s new plant in Hungary seemingly both in right- and left-hand drive. This is likely to rule them out for an Australian launch anyway, as our range of BYDs are all sourced from China.

It’s also hard to see how a plug-in of this size would be advantageous for the Australian market, with consumers (and manufacturers) generally preferring plugless hybrids in the small car class, like the current runaway success in the segment, the Chery Tiggo 4.

BYD’s European expansion is part of a larger global strategy to reach beyond China, where a bruising price war has brought margins down and competition up.

Aside from targeting Europe with Denza and locally-built BYD models, the brand is also having a crack at the historically impenetrable South Korean and Japanese markets, going so far as to build a kei-class EV specifically to comply with stringent small car design rules in Japan.

In addition, BYD has expanded to right on Australia’s doorstep with a new manufacturing hub in Thailand from which it plans to expand rapidly in the South East Asian region. It follows in the footsteps of GWM, which will start providing Australia with Thai-built cars imminently, although it’s unclear if BYD will want or need to build vehicles in Thailand for our market.

In the meantime, the Atto 1 hatch and Atto 2 small SUV have just arrived in Australia, priced from $23,990 and $31,990 respectively. BYD admits it doesn’t quite know how many sales it will do of the Atto 1, as the city car segment is poorly served in Australia. The dominant player is the affordable Kia Picanto, priced from $19,190, but only as a combustion car. It has moved a very respectable 6728 units in 2025, up 27.3 per cent for the year.

The Atto 1 and Atto 2 will be joined by the Sealion 5 affordable mid-sizer and Sealion 8 three-row plug-in by mid-2026, as part of BYD’s plan to end the year in a podium position. To do so, it will need to double its yearly sales and unseat well established marques like Hyundai, Kia, or Ford.