The Chinese company known as BYD—that’s Build Your Dreams—has an audacious plan to solve China’s energy and environment problems. Readers of this site might know BYD as the carmaker backed by famed investor Warren Buffet—and as the top contender to bring Chinese-made electric cars and plug-in hybrids to the United States.
But it may come as a surprise that BYD views the U.S. market as somewhat irrelevant, and doesn’t see high-volume sales of its all-electric e6 or the BYD F3DM plug-in hybrid as that high of a priority.
That’s because BYD’s Chairman, Chuanfu Wang, has a much bigger vision. “The goal is to create a zero emissions ecosystem,” said Michael Austin, a Chicago-based BYD vice president with marketing and public relations duties. “And you don’t create the zero carbon zero emissions ecosystem by just producing a whole bunch of electric vehicles.” BYD’s electric and plug-in hybrid cars, now available in China, will go on sale to U.S. private consumers as early as 2012.
“They own the chemicals. They own the mines. They refine the chemicals. They make their own cans for the cells. They did their own windings,” Austin said. “They did every component of the build, and that total vertical solution got them in a place where they had the lowest cost, so they could control the market.”
And what they did for batteries, they also did for cell phones. Currently, 30 to 40 percent of the world’s cell phones, regardless of the brand, can be traced back to BYD. Now they are applying the same scale to solar panels and to automobiles. They have 100 million square feet of factory space. They make every component of the vehicle, except the tires and the safety glass. And for the past two years, the company’s F3 sedan has been China’s number one seller.
BYD needs its massive scale of manufacturing to match the size of the Chinese auto market. Last year, China bypassed the United States to become the largest automobile market in the world, and it continues to grow at an impressive rate. “If BYD were to sell tens of thousands of electric vehicle in Tianjin and in Beijing, it would create a worse environmental condition than China has today. All they have are coal-burning plants,” Austin said.
Instead, BYD wants to couple solar energy generation with massive amounts of stationary energy storage using its batteries. Then, add efficient lighting at home—BYD also makes LED lighting—and electric cars for the road. “If you discharge to those energy storage plants to electric vehicles, then you have zero emissions.” Voila! The ecosystem is complete.
Austin: “We don’t want to just sell electric vehicles in our U.S. dealerships. That’s not selling the zero emission story. We want to sell solar panels. We want to sell solar-shaded parking. We want to sell LED lighting. We want to sell energy storage for your home, and charging stations coupled to energy storage, so we can do DC-to-DC quick charging. Oh, and you can use solar panels to charge your energy storage, that’s now powering your vehicle.”
BYD wants to work down the price of its electric car—without any subsidy—to $20,000 or less. Austin says that the price of BYD's EV batteries is currently at $350 per kilowatt hour. “That’s lower than everybody else. Nobody else is even close to that,” Austin said. “And that’s where we are at today.
It all comes full circle, when you consider the effects of the Chinese economy on the price of gasoline. “BYD is completely convinced that the emerging markets are going to eat up all the gasoline. When China and India emerge, the price is going to skyrocket,” Austin said.
The price in the U.S. and the developed world, that is. The Chinese government will continue to subsidize its gas to around $1.50 a gallon, according to Austin. “They don’t curb their consumption. So, we’ll get screwed with high prices, and they’ll continue to consume at incredible rates," he said. Consider that less than six percent of Chinese currently own cars, but that around 30 percent now have the financial means to buy a vehicle. “There are 330 million cars yet to be sold,” Austin said.
No comments:
Post a Comment