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Old 25th January 2010, 01:05   #1
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Default Chinese Electric Car coming to America

A new era in the automobile industry is scheduled to begin this year as a Chinese company brings a pure electric car to America.

Press reports indicate that a Chinese company called BYD Auto plans to start selling a purely electric compact called the E6 in the US sometime this year. If these reports are true BYD would get the jump on San Jose based TeslaTesla Motors which is marketing an electric-powered sports car and planning to manufacture and market electric sedans in the near future. Tesla has long term plans for an electric compact.

The interesting thing about the E6 is that it is a real car similar in size and shape to a Toyota Yaris. It can haul up to five people and can carry a real load of groceries home from the store. Unfortunately the number of miles the E6 can run on a charge is not mentioned in the press releases or the company’s website. So it’s hard to say how this stacks up to the Tesla.

Initial press releases indicate that the E6 will sell for about $40,000 which seems excessive. It should appeal to the eco geek market even at that price. Since it’s a pure electric the E6 should qualify for some tax rebates and deductions.

The E6 could be a pretty good urban run about perhaps it would be a great vehicle for messenger services or meter maids. Or as a runaround for government or corporate employees who use vehicles from a motor pool.

It also remains to be seen whether BYD’s vehicle can pass muster with US, Canadian and European safety standards which are stricter than China’s. If the E6 can’t pass safety tests it’s a no sell in America, the European Union and Canada.

BYD isn’t just banking on electric cars it has a plug in hybrid called the F3DM which could be marketed in the US. The F3DM is apparently cheaper than a Toyota Prius. If the E6 doesn’t work out BYD Auto also makes regular gas powered cars mostly low end Sedans. Since BYD already has 11 car factories it could provide potential dealers with a large stock of cars.

Still if BYD could market a practical electric car that could meet US and European standards at a decent price it would be well placed to compete with Detroit and Toyota. Now might also be a good time to enter the US car market because all of the car dealers that GM and Chrysler will be looking for a car to sell. This would also make BYD the first Chinese company to sell a car in America.

How much of BYD is hype is hard to say. BYD Auto’s products do seem to sell well in China and it does have low cost labor. The company also makes its share of arrogant boasts claiming that it will be the number one auto maker in the world by 2025. BYD might be better advised to stay home in China which is now the world’s largest car market.

Although BYD has done very well in China, one of its cars the F3 outsold the Volkswagen Jetta and the Toyota Corolla in the Chinese market. BYD Auto has also done well exporting cars to South America. Whether BYD can market cars without the protection of the Chinese Communist Party remains to be seen.

There is one big reason to take BYD and its swaggering chairman Wang Chuan-Fu seriously. Warren BuffettWarren Buffett has made a large investment in BYD Auto. Buffett and his long time business partner Charley Munger of Los Angeles (who’s even more conservative than Buffett) like BYD a lot. These guys aren’t risk takers or gamblers so this seems interesting.

One reason why Buffett maybe snooping around BYD Auto is that Wang claims to have produced a cheap battery capable of powering an electric car. If this claim is true Wang could make a fortune because that battery could be used for far more than electric cars. To power houses and to store power from windmills for example.

Of course there’s another big reason why the Sage of Omaha wants to promote electric cars. Buffett’s investment powerhouse Berkshire Hathaway owns lots of electric utilities. Widespread use of electric cars would make a lot of money for old Warren and his charities.

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