What's the Big Deal About BYD?

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Wouldn't it be great if China, land of cheap products, could bring us a low-cost, well-made electric sedan? We certainly thought so when we named China's BYD as one of our Most Innovative Companies earlier this year. Warren Buffett apparently agreed as well, buying a 10% stake ($230 million) of the car company through MidAmerican Energy Holdings. But is BYD's $22,000 electric vehical a dream that is going to be permanently deferred?

The company says that it put a plug-in hybrid--the F3DM--on sale in China this past December, but it hasn't yet appeared in any dealerships. And while BYD initially hoped to have its electric e6 sedan filling U.S showrooms by this year, the launch date has been moved to 2011. Even that seems unlikely since the vehicle hasn't passed Chinese or U.S safety tests.

BYD's lithium-ion battery business is also looking increasingly like a mirage. The batteries are built using technology that is 15 years old, and 15-30% of the products are ditched because they don't meet quality standards. The industry average for such failures is just 5%.

Maybe we shouldn't put our faith in BYD, then--but all hope isn't lost for low-cost EVs. Tata, the Indian manufacturer of the world's cheapest car, recently announced that it plans to produce a hybrid version of the Nano. No word on when that might hit the market, but at least we know that Tata is capable of producing tangible products.

[Via The Wall Street Journal]

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1 Comments

  • Michael Zawicki

    Thank you, thank you ! For us who really know how BYD works please let this be lesson. Companies like
    nokia work with BYD to disrupt Foxconn on price and access to capital. They are not a technology innovator!
    They are a fast moving, low cost player.

    Might they be a business process innovator ? Might they have a competitive advantage with regard to their talent development system - at least vs. Other China run companies ? Maybe.

    We really need to dig deeper beyond Warren Buffet and other executives who get infactuated with the story of new to the scene entrepreneur. Keep in mind the best of them are master salesmen.