BYD Going All Electric And Hybrid To Save Company

8 Апр 2014 | Author: | Комментарии к записи BYD Going All Electric And Hybrid To Save Company отключены
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BYD Going 100% Electric Hybrid To Save Company

BYD, one of China s larger automakers, recently announced a new strategic plan to save its ailing company. This follows BYD stock sinking about 75% in the past year.

The company has decided to stop producing gas engines and produce only electric and hybrid vehicles within two years.


The decision has come with pressure from the BYD stakeholders, like US investor Warren Buffett, who are unhappy with the current downturn in company profits. BYD s net profit has collapsed in recent years, from $61.1 million four years ago to only $13.1 million last year.

BYD sold just 458,000 vehicles in 2012, despite having an annual production capacity of 700,000 units a year. BYD’s first all-electric car, the F3DM, sold less than 2,300 units through the end of 2012.

Recently, BYD attempted to break into the US market, a plan that has so far failed to materialize despite assertions that the automaker would start by delivering vehicles to the fleet market.

Although BYD did land a contract in California for 10 all-electric buses  from its e-bus division, and has managed to sell a fair number of hybrids and EVs to local governments, it is still having many problems getting its vehicle line past the taxi and rental car status.

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BYD s business interests are wide-ranging, manufacturing everything from batteries for personal electronics, through to LED light bulbs, solar panels, and electric and gasoline cars and buses. There is talks of BYD selling off its solar panel division to make room for the new electric and hybrid venture.

The BYD redirection, though, is a high-risk move that could drive the company into serious trouble, said Yale Zhang, head of Shanghai-based consulting firm Automotive Foresight.

Yale Zhang also said according to Reuters :

They either know something we don t or they re actually going to take a long time, over 5-10 years, to make this radical transition so that there s little risk, referring in part to the possibility of big government incentives for conventional hybrids.

It will be interesting to see how this plays out as this bold move could make or break the troubled company.

MidAmerican Energy Holdings, a Buffett-controlled private energy group, holds just over 28 percent of BYD stock. MidAmerican initially bought into BYD for $230 million, or HK$8 a share, in September 2008. BYD shares have fallen more than 30% since mid-February.

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