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BYD


  BYD
Driving China Electric
by Barry Silverstein
June 4, 2010

As Chinese brands continue to grow on a global scale, brand names previously known only within China’s borders are now generating worldwide awareness. BYD is one such company, having risen from relative obscurity to a brand that has caused quite a stir because of its new electric car, the e6.

 
 

But there’s another reason BYD is generating a lot of buzz: it’s a company that has caught the eye of Warren Buffett. In fact, Buffett has invested over $200 million in BYD, purchasing a 10 percent stake through his Mid-American Energy Holdings in September 2008.

Indeed, in part because of Buffett’s interest in it, BYD (which the company says stands for “Build Your Dreams”) has skyrocketed to first place in Bloomberg Businessweek’s 2010 “Tech 100” list. It beat out Apple (#2) and joined the equally obscure Chinese holding company, Tencent Holdings, which invests in Internet and gaming businesses, to round out the top three.

Interestingly, BYD has gained its notoriety more for its future promises than its present business. The company began in 1995 and first became known for its rechargeable batteries. Its primary business was centered around the IT industry; BYD produced such products as chargers, connectors, microelectronics, and LED products.

But in 2003, BYD reinvented itself. It got into the automobile business by purchasing another Chinese automaker, Tsinchuan. By 2007, it was selling 10,000 of its F3 model automobiles every month in China. Last year, the F3 became the best-selling sedan in China, and now BYD is on track to become China’s largest automaker in five years.

The real excitement surrounding BYD, however, is not associated with the F3, a traditional gasoline-powered vehicle. Rather it’s the new e6, an all-electric car, which is getting the press. BYD introduced the e6 to much fanfare at the 2008 Beijing auto show, and to the U.S. market at the 2009 Detroit auto show.

BYD has already marketed a hybrid version of its F3 in China, but the e6 is the company’s first all-electric vehicle. It is currently being sold only to government agencies in China, and it will be introduced in the United States with limited test distribution by the end of this year.

In the U.S., the e6 will compete with at least two other electric cars – Japanese carmaker Nissan’s Leaf and GM’s Chevy Volt, both of which will hit North American streets by the end of 2011. Not only will BYD have a one-year jump on its competition, the company claims the full-size e6 vehicle will be able to travel 200 miles or more on a single charge – twice the distance of the Leaf. Apparently, BYD’s expertise in battery technology is paying off.

But that isn’t the only intriguing news coming from this upstart brand. BYD announced in late April that it was going to invest $100 million to establish its U.S. headquarters in Los Angeles, where it would employ up to 2,000 people within the next three years. Not surprisingly, California is where the company will launch the e6 in North America.

At the same time, BYD said it will begin to offer an entirely new line of energy-efficiency products targeting homeowners. The company plans to create home-scale batteries, solar panels, LED lighting systems, large energy storage systems, and systems to monitor and automate energy usage.

BYD has already collaborated with home builder KB Home to build homes in Lancaster, California “that will go a step further than other new solar housing developments by including batter storage of the solar electricity,” according to Sunpluggers.com, a website that reports on solar energy. Solar energy and lithium-ion battery packs are being tied together in a model home and four production homes to provide a new source of energy.

“For the first time,” says Sunpluggers.com, “[homeowners] could have significant control over their generation, storage and use of electricity, moving it from a solar array to a car battery, into the home or into a storage battery, depending on their needs and the electricity’s price at a particular time. The battery pack also could pull low-cost electricity off the grid at night for use during higher-priced peak periods, either in the home or in the grid.”

So while BYD will make a big brand splash in the United States when the e6 comes rolling off the production line, the company’s push into energy systems may ultimately represent BYD’s larger potential. Maybe that’s the real reason Warren Buffett bought a piece of the action.

 
     
  

Barry Silverstein has been a frequent brandchannel contributor since 2007. He has thirty years of advertising and marketing experience and is currently a freelance writer and marketing consultant. He founded and ran his own direct marketing agency and held executive positions with Epsilon, a leading database marketing firm and Arnold, a major ad agency. Silverstein is the author of three marketing books, including the McGraw-Hill book, The Breakaway Brand, which he co-authored with Arnold CEO Fran Kelly.

  
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