BYD is coming for Europe—but high labor costs, connectivity issues, and stubbornly loyal customers might trip up the Warren Buffett-backed EV maker

It’s taken a brutal price war with Elon Musk and an ascension to the top of the Chinese car pyramid to change that. Now that it’s left competitors in a “state of shock,” BYD has become hard to ignore.

However, as BYD fights a declining share price, Europe’s automakers have a few reasons to be optimistic that they will fare better in a battle on home soil.

BYD’s march into Europe

Carmakers hoping to maintain their market dominance while shifting to EVs have obvious cause for concern from BYD.

The carmaker has conquered the Chinese market thanks to its ultra-low prices, fending off an attempt by Musk to encroach on market share through a massive Shanghai production plant and price cuts.

The “Tesla-killer”—with its entry-level Seagull model priced at $11,000—has been able to keep prices so low thanks to its control of its entire EV battery system. This has allowed it to keep prices about 40% below competitors. 

That’s a big deal for Europe’s EV-hungry customers. A recent survey by Bloomberg Intelligence found 83% of Europeans saw EV prices as “too high.”

“BYD has been more focused on the affordable mass market, which could be attractive for buyers in the European market amid high interest rates and subsidy cuts,” Nishita Aggarwal, an automotive industry analyst at the Economist Intelligence Unit, told Fortune.

Increasingly BYD, which currently has a small presence in Europe, is putting its vast resources into placing itself on the continent. 

The group plans to build a production factory in Hungary, while earlier in January it started using purpose-built cargo ships to send its EVs to Europe.

In May, an Allianz Trade report put a figure on the Chinese automaker’s potential…