BYD Auto and the Market for Electric Cars: Global Ambitions, Nurtured in China
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Case Code: BSTR356 Case Length: 24 Pages Period: 2003-2009 Pub Date: 2009 Teaching Note: Available |
Price: Rs.300 Organization: BYD Auto Industry: Auto and Ancillaries Countries: China, USA Themes: International Expansion |
Abstract Case Intro 1 Case Intro 2 Excerpts
"It's almost hopeless for a latecomer like us to compete with GM and other established auto makers with a century of experience in gasoline engines...With electric vehicles, we're all at the same starting line."
- Wang Chuanfu, Founder and Chairman of BYD Company Ltd., in January 2009.
"BYD is growing fast and everybody's talking about Chinese car companies' ambitions for the U.S. market. But actually a lot of Chinese auto companies still need more time."
- Paul Lin, Auto Export Manager of BYD Auto, in January 2008.
"There's a lot of interest in electric vehicles because it's a technology that's emerging from China's strong research and development base for lithium-ion batteries."
- Ray Bierzynski, Vice president for Engineering in the Asia-Pacific for GM, in April 2009.
Introduction
Chinese automobile company BYD Auto found a place on the list of 'Most Innovative Companies in China' released by Fast Company in March 2009. It earned the recognition for bringing plug-in hybrid electric cars into its portfolio (Refer to Exhibit I for an overview of different types of electric cars). Also, its plug-in hybrid electric car 'F3DM', launched for sale in the Chinese market in December 2008, was among the 'Top 10 Tech Cars of 2009', in a list released by the Institute of Electrical and Electronics Engineers (IEEE) Spectrum (Refer to Exhibit II for other recognitions received by BYD Auto). BYD Auto, which had its origins in the BYD Company - a manufacturer of lithium-ion and other rechargeable batteries, was regarded as the world's first mass producer of plug-in hybrid cars.
The company had ventured into the design, development, and manufacture of different types of electric cars using its expertise in battery manufacturing. BYD Auto also had plans of introducing electric cars in the US by 2011. The electric vehicles segment was an emerging market in the US and it offered a level playing field for BYD Auto to compete with well-established giants in the global automotive industry.
In the year 2008, BYD Company attracted worldwide attention when Warren Buffett, one of the world's most renowned businessmen and CEO of Berkshire Hathaway Inc, acquired a 10 percent stake in it for US$ 230 million. The deal was made through Berkshire Hathaway Inc owned MidAmerican Energy Holdings, Des Moines...
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