Chinese manufacturer BYD has a project in the works that could revolutionize the European market for affordable electric cars. According to reports in the automotive industry, the company is considering bringing the platform and technology of its latest Japanese launch, the BYD Racco, to Europe. The Racco is a tiny kei car that has surprised many with its efficiency and price. The idea is to create a new generation of electric city cars priced below the psychological barrier of €15.000, a threshold that currently seems almost impossible to reach in Europe.
This move is no coincidence. Europe has long sought ways to democratize electric mobility, but price remains the main obstacle. Meanwhile, in Japan, kei cars have been demonstrating for decades that it's possible to make a small, safe, and affordable car. BYD has found in this philosophy the key to attacking a segment that European manufacturers have been abandoning due to its low profit margins. And it's not alone: Suzuki has already announced a 3,4-meter electric vehicle for 2027, and the European Commission itself is preparing specific regulations to promote these vehicles.
The Racco, the technological base of the project
The BYD Racco was designed from the ground up to meet Japan's strict kei car regulations, a category of ultra-compact vehicles that enjoys great popularity in the country. Its dimensions are truly impressive: 3.395 mm long, 1.475 mm wide, and 1.800 mm high, with sliding doors that make navigating congested cities easier. Launched at the end of July, it has already surpassed 1.000 orders in just two weeks, a figure that confirms the interest in this type of vehicle.
But the most interesting thing isn't the car itself, but the technology it conceals. The Racco debuts the X-PACK battery system, a solution that integrates components normally located under the hood, such as the inverter, directly into the battery pack. This frees up space in the front, which is used to improve crumple zones and passive safety, and also allows for a larger cabin without increasing the exterior dimensions. As for range, there are two versions: one with a 22,4 kWh battery that achieves 210 kilometers, and another with a 35,84 kWh battery that reaches 320 kilometers, a record for a car in this category.
Europe wants to recover the electric urban vehicle segment
The regulatory landscape is shifting in favor of these cars. At the end of 2025, the European Commission presented a proposal to create a new subcategory of small and affordable electric vehicles, with a maximum length of 4,2 meters and specific measures to incentivize their manufacture within the EU. In its analysis, Brussels found only 12 electric models under 4,2 meters in length and priced below €25.000 across the entire European market, demonstrating the significant market gap that exists.
The proposal includes additional CO2 emissions credits for small electric vehicles manufactured within the EU. This could be a decisive incentive for BYD to accelerate its plans. The company already has a plant planned for Hungary, slated to begin operations in 2026, and producing these city cars there would allow it to avoid import tariffs on Chinese vehicles and benefit from the tax advantages currently being developed.
In Japan, the Racco starts at 2,14 million yen, about €11.500. If BYD manages to maintain a similar price in Europe, we'd be talking about an electric car for under €15.000, something that seems like science fiction today. The key lies in the economies of scale and cost reductions enabled by the integration of the X-PACK, which eliminates the need for additional components and simplifies production.
European manufacturers, who for years have focused their efforts on SUVs in the €40.000 or €50.000 price range, are now watching with concern as the Chinese encroach on the entry-level segment. BYD has already proven in Japan that its formula works, and all signs point to Europe being the next stage. The question is how long it will take for these cars to arrive at Spanish dealerships and whether government subsidies will be sufficient to make the final price truly attractive.
In short, the arrival of an electric BYD for under €15.000 based on the Racco is not a pipe dream. The technology is already proven, European regulations are being adapted, and local production in Hungary is underway. If everything goes according to plan, in the coming years we could see a small, safe, and affordable electric car on our streets—something many considered impossible. Electric mobility doesn't have to be a luxury reserved for the few, and BYD seems determined to prove it.
