Skip to content

China’s BYD shows off a nice bus but still hankers after passenger EV sales in U.S.

February 5, 2015

One thing I can say about BYD, it’s becoming consistent. That’s good. The Chinese automaker learned some lessons from the blunders when it first tried to enter the U.S. market. It has stuck to its strategy of selling its electric buses here for the time being. But I learned from BYD executives at a recent event here in Los Angeles the company still has its eye on the retail EV market, as well.

Yesterday I attended an event meant to show off BYD’s new articulated battery-electric bus. The 60 footer, billed as “the world’s largest battery electric vehicle,” was nice. I’ve come to expect that from BYD buses. Of course I’m not driving them so can’t speak to performance. But they are always spacious, well finished, and of course quiet.
OLYMPUS DIGITAL CAMERA

This bus, which we took from Union Station in downtown Los Angeles to City Club, a fancy venue on a high floor of another downtown location, wasn’t quiet however. It was quite loud, a result of being packed with people, from reporters to sustainability consultants to labor issue professionals to bankers. All but the journalists had played or are playing a role in BYD’s effort to build and promote e-buses here in California.

BYD has had some success in getting small numbers of its e-buses into municipal fleets for demonstration and testing. Five of them will start operating in the Los Angeles municipal fleet this year. BYD buses are also trolling the roads in Mexico, Chile, Edmonton, and Sydney, among other locations. And in January in New Orleans at a trade show, BYD unveiled a long-distance electric bus that could go a claimed 190 miles on a single charge.
What about the 25-bus Long Beach Transit contract that BYD had apparently landed only to have it snatched away because BYD had not filed the correct paperwork related to the federal funding Long Beach would have used for the purchase?

BYD re-bid for the contract. “Long Beach is in the final stage of evaluating bids,” said BYD’s new VP of sales, Macy Neshati, whom I spoke with at the event. “We’d really love to see that come together.”
The demo bus we took to City Club was a 60-ft articulated pure electric vehicle. An articulated bus is two 30-foot buses connected by an accordion-like section. According to BYD, the articulated bus holds 120 passengers and can go 170 miles on a single charge. “Proudly designed and built in the United States of America,” said the promotional material.

Neshati said the 60-ft. articulate buses will cost around $1.2 million each. A 40-ft. bus costs around $800,000, he said.

Electric buses have been around for quite some time, but they have been slow to catch on. Why, I asked Neshati? Bus companies are risk-averse, he said. They worry that the technology is “new” and that the companies will go out of business. That’s why government subsidies are needed.
“We try to explain to them that there is no risk” working with BYD, he said. “We are not a startup. We have the resources and the capital.”

Nonetheless, government funding is still the secret sauce to get contracts, and BYD has several funding applications in progress with the California Energy Commission, said Neshati.

Is Berkshire Hathaway the secret sauce for BYD’s retail distribution?

So, BYD’s bus business seems to be going okay. What about electric passenger cars? That is where BYD got off to a rocky start here in the U.S.

When BYD opened its North American headquarters here in Los Angeles in late 2011, it planned to build a dealership network and sell the e6 pure electric crossover.

But the vehicle was not ready for prime time in the U.S. market. Its fit and finish were not up to U.S. consumer standards, among other issues. So BYD put those plans on hold to concentrate on selling its electric buses here in the U.S. To that end, it opened a manufacturing plant in Lancaster, Calif. in 2013.

So, I asked both Neshati and Matthew Jurjevich, market research analyst with BYD America Corp., what’s up with retail sales of PEVs here in the U.S.? They gave me slightly different answers but both confirmed that BYD still plans to sell passenger EVs here.

“We are keenly interested in being able to bring an all-electric car (to the U.S.) market, with a mix of plug-in hybrid electric” cars as well, said Neshati.

Jurjevich wouldn’t speculate on what kind of vehicle would get here first, though he did point out that BYD’s philosophy has always been to bring affordable cars to market. But he did say retail sales are “100 percent on our road map.”

BYD should have a number of models to choose from in coming years. Its first electric vehicle, the pure-electric e6, sold poorly. It seems to have been relegated to taxi fleet status for now. But it is working on an improved BEV, it seems.

Meanwhile, its new plug-in hybrid electric (PHEV) models have proven popular in China. Final figures aren’t yet available, but 2014 sales of the Qin PHEV sedan were expected to be around 15,000 units, said BYD. According to LMC Automotive, BYD sold 437,725 light vehicles in 2014, down 14 percent compared to 2013.

It expects its Tang PHEV SUV, launched in January, to sell very well, and more PHEV SUV models will follow, BYD has said.

BYD Tang PHEV

BYD Tang PHEV


Those models might appeal to U.S. drivers. But distribution is the 800-pound gorilla. BYD started to set up a dealership network here in the U.S. in 2012 but shelved that plan. Now, however, the U.S. media is full of speculation that Berkshire Hathaway Automotive, Warren Buffett’s recently-acquired dealership group, will distribute BYD vehicles in the U.S. Buffett bought 9.9 percent of BYD’s Hong Kong-listed company in 2008.

I asked both BYD execs about using Buffett’s dealerships to sell BYD cars. “That is 100 percent speculation,” said Jurjevich. As for Neshati, he said: “At this point it is all speculation.”

I don’t see BYD cars being sold at Berkshire Hathaway dealerships here in the U.S. within the next 2-3 years. I don’t think they are ready for the U. S. market, frankly. But I may be wrong. I’m going to check them out at the Shanghai Auto Show in April.

Advertisements
2 Comments leave one →
  1. February 25, 2015 6:09 pm

    Interesting that if BYD sells PEV’s through Buffett’s dealerships, they would avoid any of the headwinds Tesla is encountering in various states vis-a-vis the state auto dealer associations. On the other hand, if Tesla does wind up clearing the way for direct sales by manufacturers, the reduced cost of doing so relative to setting up dealer locations might appeal to BYD. But, they must keep in mind that selling the car is only the first step. They still have to set up a service mechanism, yes even for PEV’s. Maybe they’ll sub that out?

  2. February 25, 2015 7:02 pm

    BYD tried the dealership network originally and was quickly discouraged. Being able to distribute through the Berkshire Hathaway Automotive Group network would be great but BYD has to some up with a car consumers want to buy first. I am also not convinced that it won’t focus on fleets for its passenger PEV as well.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: