BYD at the Central China High-Tech Fair, Shenzhen, November 2009.
Source: Wikipedia / Brucke-Osteuropa.
Over the course of the past few weeks we have seen a couple of noteworthy developments at Chinese auto maker BYD (BYDDF.PK). I have previously discussed the troubles at BYD, which by mid-September had taken the stock down 72% year to date.
However, a couple of developments suggest that the Warren Buffet-backed automaker is at least worth keeping an eye on in the period ahead. In late October, the company opened its US Headquarters and 30,000-square-foot facility in Los Angeles. The aim is to create 150 new jobs and to move towards providing a range of new battery electric vehicles – most importantly the e6 battery-electric SUV. The company will also be marketing a 40-passenger battery-electric bus. One such bus has already been tagged by Hertz for use in shuttling its customers around LAX.
Also in late October, BYD announced that it would start selling its e6 battery electric SUV to the general public in China. Auto Observer points out that with a 190-mile range on a single charge, this will be “the first long-range all-electric vehicle to be offered to the masses in that country”. The rough details we have thus far are the following:
- The e6 is a 5-passenger all-electric SUV.
- It utilizes Lithium Iron-Phosphate battery chemistry.
- The car will retail at 369,800 yuan (circa $57,000). However, BYD indicates that after government subsidies in China the net cost should be reduced to $38,000.
- It has a range of 190-miles on one charge. Currently only BYD and Tesla (TSLA) offer electric vehicles with a range above the 70 to 100-mile area targeted by most other automakers who appear to be focusing on the second car market.
- Home charging units will be installed in conjunction with China Southern Grid.
- A fleet of e6 SUVs have seen significant testing on the streets of Shenzhen, where they have accumulated a reported 3.8 million miles, driven by local taxi drivers.
BYD´s share price has suffered this year as sales of its traditional and hybrid cars have disappointed. Auto Observer reports that: “For the first half of the year, BYD’s profit dropped 89 percent from a year earlier to 275 million yuan ($43.1 million) on a combination of rising costs and an 11-percent drop in revenue. Last year, BYD sold 519,800 vehicles, well short of the goal of 800,000 sales the company had set for itself; it sold just 232,400 vehicles during the first half of this year”.
This will be a very interesting initial test for both the EV market in China and BYD itself. The company also has a 50:50 joint venture with Daimler AG for the production of a battery electric vehicle, a prototype of which is scheduled to be produced by the spring of 2012. If sales of the e6 go well, there´s seems plenty of room for BYD to expand. Worth keeping an eye on.
Finally, you can read a more detailed, bigger picture view of the future of the electric car here.
Disclosure: I have no position in BYDDF.PK. I am long TSLA.