OBAMA BRINGS NEW ENERGY, CHINA BRINGS EV TO MARKET

Monday, as President-elect Barack Obama introduced his energy team to the country and promised to buoy faltering U.S. markets with a New Energy economy, Chinese carmaker BYD Auto brought its F3DM, the world’s first mass-produced plug-in hybrid electric vehicle (PHEV), to market.

Obama’s energy team is getting generally favorable response both in the seats of federal power and in the environmentalist community. The choice of Nobel laureate physicist Steven Chu as Secretary of Energy, known for his strong commitment to New Energy and to the fight against global climate change, affirms the President-elect’s campaign promise to restore scientifically-informed and fact-based decision-making to energy and environment issues.

Chu and former New Jersey gubernatorial chief of staff Lisa Jackson, nominated for EPA Director, former Los Angeles assistant mayor Nancy Sutley, nominated to head the Council on Environmental Quality, and former Clinton EPA Director Carol Browner, to coordinate White House energy and climate change policy, are widely seen as sound choices to back Obama in his drive to rebuild the U.S. energy infrastructure and create the "hybrid" economy.

President-elect Obama: “To control our own destiny, America must develop new forms of energy and new ways of using it. And this is not a challenge for government alone. It's a challenge for all of us.

"The pursuit of a new energy economy requires a sustained all-hands-on-deck effort, because the foundation of our energy independence is right here in America, in the power of wind and solar, in new crops and new technologies, in the innovation of our scientists and entrepreneurs and the dedication and skill of our workforce. Those are the resources that we have to harness to move beyond our oil addiction and create a new hybrid economy…”

From AP via YouTube.

One of the tenets of Obama’s New Energy for America agenda is to put 1 million PHEVs on U.S. roads by 2015. How much difference will it make to the U.S. economy if they are Chinese-made PHEVs?

Well, it might help some. Warren Buffet owns ~ 10% of BYD Auto, a Chinese company that was one of the most successful computer battery makers in the world before going into the car business. (See BUFFETT BUYS CHINESE ELECTRIC CAR COMPANY)

Wang:“Buffett’s investment helps us enhance our brand image…It’s a long-term investment and it will help our growth in the long run.”

The F3DM has a 100-kilometer (62 mile) battery-only range and then will switch to its small, gasoline-powered internal combustion engine (ICE). F3DM lithium-ion batteries can be fully recharged from an outlet in 7-to-9 hours, 50% repowered via a quick charge station in 10 minutes and fully repowered at the station in 1 hour. The battery can be recharged 4,000 times.

The retail price: Less than 150,000 yuan (~ $21,400). Toyota’s Prius goes for ~ 259,800 yuan.

Some say it will require time for consumers to accept the new form of vehicle power. Others say the excitement of the new new thing, along with government subsidies for New Energy vehicles, will double 2009 vehicle sales.

China is encouraging its carmakers to develop New Energy vehicles to help break oil import dependence and take the domestic industry away from GM and Toyota. The government is studying ways to incentivize production and sales and has set a goal of having 60,000 EVs on the roads of 10 cities by 2012. One plan is to eliminate sales tax on smaller engines.

Wang Chuanfu, founder/Chairman, BYD Auto: “The development of electric-powered vehicles is the best way for the Chinese auto industry to surpass other leading countries…”

Footnote: BYD and Buffett’s MidAmerican are also developing batteries to store wind and solar energy-generated electricity. They claim to be 1-to-2 years from bringing such batteries to market. Commercial-scale battery storage at a cost-effective price is the holy grail of New Energy.

Being able to efficiently store solar and wind energies would eliminate the inconvenience of intermittency and make the sheer capacity to manufacture the energy-generating turbines and solar infrastructure and the batteries the only obstacle to a 100% New Energy economy. And it would allow for the complete reversal of global climate change.

Most companies who claim they can efficiently make such batteries are unlikely to be able to do so. But most companies who have been talking about bringing PHEVs to market have not done so. BYD Auto has.

Cost-effective commercial-scale battery storage of New Energy is even more of a game-changer than the PHEV. Done by a BYD/Mid-American partnership, it would surely herald a global New Energy economy but it would mean much more than that. It could potentially mean the dawn of the New Energy Age.

From oneonetwotwooneone via YouTube.

World's first mass-produced plug-in hybrid car on sale in China
December 15, 2008 (China View)
and
BYD Adds Plug-In as China Gets Edge on Toyota, GM
Tian Ying, December 15, 2008 (Bloomberg News)
and
Obama names energy secretary, environmental team
Tom Doggett (w/ Neil Stempleman), December 15, 2008 (Reuters)

WHO
BYD Auto Co. (Wang Chuanfu, president) Warren Buffet; Steven Chu, Secretary of Energy-designate; Lisa Jackson, EPA Director-designate; Nancy Sutley, nominee to head the Council on Environmental Quality; Carol Browner, Clinton administration EPA Director, nominee as White House energy and climate change policy coordinator;

WHAT
As Barack Obama introduced his energy team, BYD Auto introduced the 1st commercial-scale availability of a PHEV.

Or China. (click to enlarge)

WHEN
- Secretary of Energy-designate Steven Chu won the 1997 Nobel Prize in Physics.
- 2003: BYD Co. expanded from battery-making into the auto business with the purchase of Chinese carmaker Shaanxi Qinchuan Auto Co.
- BYD Auto expects 2008 sales of 180.000 cars and 2009 sales of 350,000 cars.
- GM, Toyota and Honda (among others) have said they will bring PHEVs to showrooms in 2010.
- GM started selling a Buick LacCrosse Eco-Hybrid in China in July and Nissan says it will sell EVs in China by 2012.
- U.S. sales of the F3DM will likely start in 2011

WHERE
- Obama made his announcement in Chicago.
- BYD is based in Shenzhen.

WHY
- Secretary of Energy-designate Steven Chu presently directs the Lawrence Berkeley National Laboratory at the University of California.
- Browner is the first to hold the position as White House coordinator of energy and climate change policy as it evolves through the many involved federal agencies.
- EPA head-nominee Lisa Jackson has to now been chief of staff to the New Jersey governor and Nancy Sutley, the nominee for head of the White House Council on Environmental Quality has been deputy mayor of Los Angeles.
- MidAmerican Energy, subsidiary of Buffett’s Berkshire Hathaway, bought 10% (225 million shares) of BYD Auto for $230 million in August 2008.
- BYD Co. is the world’s biggest maker of mobile-phone batteries.
- BYD sells the F3, F6 and F8 ICE vehicles and plans to add 5 new models next year in 2009.
- BYD will boost early business with fleet sales to government agencies and corporate customers. The government of BYD’s home city of Shenzhen, the provincial government of Guangdong and China Construction Bank have pledged to buy.
- The Prius, China’s bestselling hybrid, sold 748 units in the 1st 10 months of 2008.

Opportunity is knocking. (From the Center for American Progress - click to enlarge)

QUOTES
- Wang Chuanfu, president, BYD Co.: "The F3DM is the world's first hybrid car that is not reliant on specialized electric charging stations. It is the cutting-edge product to the global green auto industry…"
- Yale Zhang, director, CSM Asia: “BYD is making progress in the right direction…Still, a lack of fast recharging facilities and other infrastructure is handicapping BYD’s efforts.”
- Wang, BYD president, on the proposed Chinese sales tax benefit for PHEVs: “It would be a very big push for car sales…”