Just as President Obama was spending the day touring yet another battery factory, Yang Jian of Automotive News China has an update on how BYD, the Chinese battery-maker in which Warren Buffett's Berkshire Hathaway made a highly touted investment, is moving away from electric vehicles:
BYD has abandoned its false hopes for strong EV sales. Instead the company is investing in its gasoline vehicles and is moving them upscale....
While BYD shakes up its lineup of gasoline cars, it also appears to be reconsidering its investment in EVs.
The company has invested hundreds of millions of dollars to develop plug-in hybrids and EVs. But sales have been pitifully low. In part, that's because China's cities lack charging stations. EVs also remain expensive despite hefty incentives.
Should BYD continue to spend tons of money to build more and better EVs? Or should it devote more resources to its gasoline vehicles?
Judging by the prospectus for the initial public offering that BYD launched in June, it has shifted back to gasoline vehicles.
According to the prospectus, BYD will invest virtually all of the 2.2 billion yuan raised from its stock sale to expand production and upgrade r&d for its gasoline models.
Only a small portion will be used to produce batteries for electric tools, and no proceeds have been allocated for plug-ins or EVs.