Chinese automakers may be ramping up their research, development and production of electric vehicles just in time to challenge U.S. automakers in their own market.
Although thundering trucks and SUVs still crowd U.S. highways and parking lots, Americans are gradually turning to smaller, often hybrid, cars for fuel efficiency and lower environmental emissions. Even billionaire investor Warren Buffett is betting on the market for more fuel efficient and electric vehicles, including those made in China.
China announced new efforts early this month to become one of the world’s top manufacturers of hybrid and electric cars within the next three years, which could mean a significant challenge to the electric car efforts undertaken by struggling U.S. automakers such as Ford (Stock Quote: F) and General Motors (Stock Quote: GM).
BYD Electronic, a Chinese cell phone battery maker which supplies batteries to cell phone producer Nokia (Stock Quote: NOK), plans to be one of the top electric car producers. This has caught Buffett’s attention—and his money.
Last fall, Buffett’s MidAmerican Energy Holdings unit of Berkshire Hathaway (Stock Quote: BRK.A) paid $230 million for a 10% stake in BYD Auto (short for “build your dreams”), based in Shenzhen, China.
BYD’s all-electric E6 automobile debuted at the Detroit Auto Show in January and it’s expected to enter the U.S. market in 2011, along with a plug-in hybrid model, the F6DM.
In addition, Nissan (Stock Quote: NSANY) and its French partner Renault signed an agreement with the Chinese government to develop electric cars and a network of battery charging stations in Wuhan, China. A lack of recharging infrastructure, combined with easy access to gas stations, is one of the major factors preventing widespread use of electric vehicles.
BYD’s all-electric E6 mid-sized vehicle can run for 250 miles on a single charge and tops out at 100 miles per hour. The company’s F3DM model, which can travel up to 60 miles on its lithium ion battery alone, is a gas-electric hybrid which runs on electricity to 37 miles per hour, then switches to a gas engine when you accelerate beyond that.