Buffett Cars
BYD is a Chinese car company (BYD = Build Your Dreams). Easy to ignore, unless one of the world’s canniest investors says differently. Not only says – but acts. Warren Buffett bought 10% of the company a couple of years ago investing $230 million. So there must be something special about BYD.
They caught the interest of the British Broadcasting Corporation (BBC) and they interviewed the founder, Chief Executive and Chairman Wang Chuanfu.
What has emerged from their interview is one of the most astonishing stories of a company’s expansion in modern history, with huge implications for future transportation.
Wang Chuanfu was a government scientist when he borrowed the equivalent of $300,000 fifteen years ago to make batteries for mobile phones, in Shenzhen in Southern China, just north of Hong Kong. He had a staff of 20 employees.
The company flourished so much so that it expanded into making automotive batteries ten years ago. Yet again, it flourished, and in 2003 it started to make complete motor vehicles. By 2009 it was producing nearly half a million vehicles a year, (to put this into perspective, that would account for nearly half of all motor cars sold in Australia last year).
Just two years ago it launched the first petrol/ battery powered hybrid car in China. It was a huge success and BYD now employs over 200,000 workers.
BYD Hybrid Car
So when the Chairman talks it’s worth listening to.
Interviewed by Peter Day, Wang Chuanfu says that BYD will be the largest car manufacturer in China by 2015 and the largest in the world by 2025. Big claims, but can he back it up?
On the basis of their current speed of growth you have to take them seriously, but even more so when you see their current product range. China has no petrol reserves, so the country is totally dependent on foreign oil – a position that they find uncomfortable. They need to limit their dependence on foreign oil, and are thus very keen to help with the development of battery powered vehicles. In fact the cost in the showroom of a BYD F3 ( the battery/petrol hybrid) is nearly 50% less than its full retail price due to the subsidies received from both the national and local governments. It retails for less than $14,000. Such assistance from the Government has naturally led BYD to concentrate on its development of the electric vehicle, and they are making amazing progress.
Currently there are virtually no fully electric passenger cars on the market in Australia, the exception being the Mitsubishi i Miev (leased out to some government agencies). Its range is 150km before a full overnight recharge.
BYD has already produced a taxi that is fully operational in its home city with a range of 300km between full recharges, and 200km before a part charge that takes less than an hour!
Fully Electric BYD Taxi
That means that they have a fully operational 23 hrs out of 24 electric taxi that can cover 400kms each day.They claim that by 2012 they will have a 400 km range electric car in production for the Chinese market, and it won’t be much longer before they start an export programme for the long range electric cars to the USA, Europe and possibly Australia. Now we can see why Warren Buffett was so keen to invest in this operation.
For the Australian motorist it is pretty clear that electric cars are going to play a crucial role in Australia’s automotive future.
Level 2, 9 Help Street
edward carrier says:
This car sounds exactly the car we need & want in australia at the earliest possible time, I for one would be very interested in aquiring more information with the intention of buying one. edward carrier.
March 24th, 2011 at 10:32 am
Phill says:
Sounds like a great share buy.
March 24th, 2011 at 11:22 am
Cyrus Mbugua says:
Hi to whoever concerned this is a very good and noble idea and would not mind investing in this company.I would also like to buy an electric car.Thanks in advance.
March 24th, 2011 at 6:24 pm
B Strand says:
Great idea, but where is all the power to charge the batteries coming from. Can’t see this type of electric car being any kinder to our enviroment than present petrol/diesel cars.
March 26th, 2011 at 12:04 pm