The Cuban government, which owns about half of the country’s cars, has placed an order for just over 700 passenger vehicles through Chinese automaker Build Your Dreams (BYD).
“Cuba is buying a fleet of fuel efficient cars through a company called Tecnoimport to support its growing tourist industry,” Forbes reported. “The order for its first 719 vehicles will be Cuba’s first fleet of tourist rental vehicles and BYD’s largest vehicle order in the Cuban market.”
The order marks the largest for BYD in Cuba, but not the first. Last November, after displaying its F3 sedan and S6 SUV at the Havana International Expo, the Cuban government purchased 40 vehicles from BYD.
Rodrigo Malmierca Díaz, Cuba’s Minister of Foreign Trade and Investment, said futures orders for government official vehicles may follow later.
BYD said that its gasoline-powered Suri, L3 and G6 sedans, S6 SUV and M6 MPV will all be part of the upcoming order. However, it doesn’t appear that the e6 (BYD’s battery-electric sedan) or its hybrid Qin and F3DM will be included in the shipment.
For Tesla, General Motors and other U.S. automakers, opportunities are still limited as there is no retail market currently established in Cuba. But this may end soon. After President Barack Obama lifted the 54-year old trade embargo last year, U.S. auto dealers immediately began researching new possibilities.
“We are reviewing the initiative to determine its potential impact for the auto industry,” said a Ford representative last December.
General Motors also commented, saying, “We will certainly evaluate any opportunities that may present themselves.”
On the outside, Cuba appears to offer a lucrative market for the U.S. auto industry. Reuters reported last year that there are 650,000 vehicles currently in the country. Many of these are American classics built before 1959, possibly ready to retire from service.
“No doubt there’s a potential growth. Cubans love American cars, the demand is there,” said Akshay Anand, an analyst with Kelley Blue Book. “You can look at it and say Cuba is an oasis for the automakers.”
But even though BYD was able to get into Cuba before Tesla, its position in line doesn’t guarantee its success in the retail market. After the embargo was lifted in 2014, Automotive News stated that a “major headwind [for the auto industry] is purely economic: Nearly all Cubans live modestly and cannot afford new or used American cars.”
The cost for BYD’s e6 hatchback (which currently isn’t available in the U.S.) is estimated at $35,000, matching the price of Tesla’s upcoming Model 3. Price estimates don’t include potential incentives.