BYD, the Chinese car company backed by investment guru Warren Buffet, has big dreams. The company hopes to be China’s No. 1 automaker in about five years and to be the world’s leading carmaker by 2025. And they plan to get there by selling green cars—as many as 9 million hybrid or plug-in cars a year by 2025, according to company executives. That’s the total number of cars and trucks that Toyota, currently the world’s largest carmaker, sold last year.
To achieve its goals, BYD will have to pick up its pace. Last December, BYD became the first automaker to sell a plug-in hybrid car in the world, but sold fewer than 100 F3DM plug-in hybrids through August, according to Gasgoo, a website reporting on the Chinese auto industry.
The company will have an even bigger challenge selling its e6 all-electric car, which carries a price tag of about $44,000—twice the cost of the F3DM plug-in hybrid. The company will rely on the Chinese government, which has a keen interest in greener cars, to buy the e6 car for fleets, when it introduces the car in China later this year. BYD signed a memorandum of understanding with Volkswagen in May to explore options for partnership on hybrids and electric vehicles.
The New York Times earlier this year reported that China plans to boost its annual production of electric and hybrid cars to 500,000 in the next two years from just 2,100 last year.
BYD aims to bring the e6 to the United States by 2010. Unlike the small city-oriented electric runabouts on slate from established carmakers, the E6 is a five-passenger wagon capable of carting a typical American family. Moreover, the E6 has a range of 200 to 250 miles. Yet, BYD’s cars have not yet been certified for sale, and face questions on quality, crashworthiness, and equipment.
Despite these hurdles with selling green cars, BYD’s overall vehicle sales have been brisk. The company sold 250,000 cars in the first eight months of the year—on pace to double last year’s sales and profits. BYD’s gas-powered F3 was the No. 1 selling car in China three times this year.
Rising sales and Buffet’s imprimatur helped BYD’s stock surge about 650 percent during the past year—earning Buffet a cool $1 billion after paying $230 million for a 10 percent stake last year. The company’s chairman Wang Chuanfu said earlier this month that Buffet, who currently owns a 10 percent interest, intended to raise his stake in BYD.