Buffett-Backed BYD Shifts Focus to Plug-in SUVs

By Bloomberg News

BYD Co. (1211), the Chinese electric automaker partially owned by Warren Buffett’s Berkshire Hathaway Inc. (BRK/B), said it will focus on introducing plug-in hybrid SUVs this year to cater to demand for roomier and high-riding vehicles.
The Shenzhen, China-based carmaker began taking orders for the 300,000-yuan ($48,000) Tang SUV, named after the seventh-century dynasty that ruled China for almost 300 years. The company plans to add another two plug-in sport utility vehicles this year, named after the successive Song and Yuan dynasties, while a third, the Ming, will be introduced later.
“SUV sales have been rising at a fast pace and we have enough capacity to make SUVs,” BYD Chairman Wang Chuanfu said on Tuesday in Shenzhen. “ We will stick to the direction of plug-in hybrids.”
BYD, founded by Wang as a battery and handset-component maker, has been adding plug-in electric vehicles such as the Qin that can also
run on gasoline amid a dearth of charging stations in China. Alternative-energy vehicles enjoy government subsidies and exemptions from license-plate registration fees and usage restrictions in many cities in China.
“We expect BYD to see solid growth in PHEVs this year,” said Janet Lewis, an analyst at Macquarie Group Ltd. in Hong Kong, referring to plug-in electric vehicles. “By the end of 2016, however, we expect to see a number of automakers launch PHEVs, so BYD’s products will face more competition.”

Photographer: Brent Lewin/Bloomberg

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BYD’s shares rose 4.3 percent in Hong Kong trading, the biggest gain since Jan. 2. The benchmark Hang Seng Index advanced 1.7 percent.

SUV Demand

Passenger-vehicle sales rose 10 percent to 18.9 million vehicles last year, slowing from the 17 percent gain in 2013, according to the China Passenger Car Association. Minivans and SUVs remained the fastest-growing segments, while sedan sales growth fell to 5 percent from 13 percent.
The company said it is targeting to sell 15,000 of the e6 all-electric car this year to taxi fleets, and will start rental services using the model in Hong Kong.
In November, BYD said it will lease 200 of the e6 to a London private-car service by April. The company had said at the time it’s also working on plans to export e6 cars and electric buses to markets including Chicago and New York. And in October, BYD won a tender to supply emission-free taxis in Brussels.
BYD, which tumbled by a record in Hong Kong on Dec. 18 for undisclosed reasons, has risen 16 percent since then.