BUFFETT BUYS CHINESE ELECTRIC CAR COMPANY

Plug-in Hybrid Electric Vehicles (PHEVs) and Electric Vehicles (EVs) are popping up everywhere. Reports are coming in that they are the rage of the Paris auto show. And now Warren Buffett has bought in.

In his typical Midwestern, understated manner, Buffett told Charlie Rose he "hopes" BYD Auto will make a good electric car. Actually, a subsidiary of his Berkshire Hathaway put $230 million worth of "hopes" into BYD Auto.

BYD Auto is a Chinese company but the big investment from Buffett’s financial empire is likely to help finance BYD's entry into the U.S. EV marketplace that is shaping up to emerge over the next 2-to-5 years and be highly competitive.

BYD Auto is reportedly considering Portland, Oregon, for a trial run of 10 plug-in vehicles as part of a local (yet-to-be-determined) company's fleet. Oregon Governor Kulongoski and other state and local leaders have a bigger dream. They want to see a BYD Auto manufacturing facility in the Portland area. The Governor has formed a working group to write policy and create the infrastructure needed to lure an electric car builder to the state.

There is a provision in the newly-passed federal financial rescue package that provides a tax credit to buyers of PHEVs and EVs. It is expected to incentivize this type of development.

Economic times are threatening right now and it looks like they could get tough in the near future. But from Detroit to Portland, there is a new wave rising. The future of personal transportation is electric.

BYD Auto’s PHEV unveiled. From ChinaCars via YouTube.

Buffett buys into Chinese electric car maker
September 30, 2008 (Portland Business Journal)

WHO
BYD Auto (Henry Z. Li, general manager of auto export trade); Berkshire Hathaway Inc. (Warren Buffett, CEO); MidAmerican Energy Holdings Co. (subsidiary of Berkshire Hathaway); Pacific Power (subsidiary of MidAmerican Energy); Shaanxi Qinchuan Auto Co.; Ted Kulongoski, Governor, Oregon; Sam Adams, Mayor-elect, Portland; Gordon Smith, Senator, Oregon

WHAT
MidAmerican Energy, subsidiary of Buffett’s Berkshire Hathaway, bought 10% (225 million shares) of BYD Auto for $230 million.

A closer look. From AutoBlogGreen via YouTube.

WHEN
- 2003: BYD Co. expanded from battery-making into the auto business with the purchase of Chinese carmaker Shaanxi Qinchuan Auto Co.
- April to October, 2008: BYD Auto executives visited Portland twice.
- August 2008: BYD Auto general manager Li met with Governor Kulongoski, Portland Mayor-elect Sam Adams and Oregon Senator Gordon Smith to discuss the company’s plans.

WHERE
- BYD Auto is based in Shenzhen, China.
- BYD Auto is considering Portland as a test market for its electric automobiles.
- Governor Kulongoski will go to China and Japan in November to meet with BYD Auto, Toyota and Nissan officials and make the case for developing auto manufacturing in Oregon.

WHY
- BYD Co. is the world’s biggest maker of mobile-phone batteries.
- BYD Auto is using the battery technology to bring a superior EV to the world market.
- BYD Auto is currently looking for a U.S. test market for its PHEVs asnd EVs.
- BYD will initially place 10 vehicles in a local corporate fleet to study and gauge performance in a controlled setting.
- Oregon officials hope BYD Auto will eventually manufacture PHEVs and EVs in the Portland area.

Warren Buffett: He's the 2nd-richest American, he's for the rescue package and he's for plug-in vehicles. Let's hope he's right about both. (click to enlarge)

QUOTES
- Warren Buffett, CEO, Berkshire Hathaway: “We are thrilled to be partners with BYD and the people of China…”
- David Sokol, CEO, MidAmerican: “[BYD will make a] dramatic environmental impact with their products.”
- Oregon Governor Kulongoski: “We have to move away from gasoline powered vehicles and move towards alternative power sources such as electric, natural gas and fuel cell vehicles — and Oregon is positioned to be a national a leader for this next generation of vehicles."