> Warren Buffett Blog: More info on BYD the Chinese auto company backed by Warren Buffett

Wednesday, August 5, 2015

More info on BYD the Chinese auto company backed by Warren Buffett

Warren Buffett, Chairman and CEO of Berkshire Hathaway, owns a substantial share of BYD, China’s most successful electric car firm. BYD isn’t anything like Youxai, the copycat that emerged last week. It’s a car firm with its own idea about what an EV should be and who should buy it.
Hybrids still work for BYD

BYD makes most of its sales in China, and its most successful car make a pure EV that compares to the Tesla Motors Model S. Instead the firm makes the Qin, a plugin hybrid that uses its power pack for short trips and relies on petrol for longer journeys.

Tesla Motors had problems selling the Model S in China because of a lack of charging infrastructure. A focus on hybrids, at least in the short term, has allowed BYD to avoid that problem. The firm has sold a total of 31,366 units of the Qin in China through June 2015.

The battery in the Qin is nothing on the Tesla Motors Model S. The power cell comes in at just 13 kWh, five times smaller than the lowest option on the Model S. It can’t compete on power either. The car goes from 0-60 in 5.9 seconds, a lot slower than the 2.8 second charge that Ludicrous mode on the Model S will allow when it arrives in the coming weeks.

Direct comparisons don’t flatter the Qin, but the car’s real power is in its price tag and its appeal to those who live in a country with poor charging systems. The BYD Qin costs around $31,000. A large subsidy from the Chinese government brings that cost down to just $25,400.

The Qin is facing the same market segment as the Tesla Motors Model 3, a car that won’t be released until 2017. Just because it’s a hybrid doesn’t mean that it shouldn’t be taken seriously. The Chinese government regards it as a new-energy vehicle, and Warren Buffett thinks the car is worth backing.