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Business
Print Edition> Business
UPDATED: February 5, 2010 NO. 6 FEBRUARY 11, 2010
BYD's American Dream
BYD struggles to fulfill its dream of selling electric cars to American households
By DING WENLEI
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"Although the construction of related facilities is even slower in the United States, we will follow this plan and strive to make the e6 available in the market by the end of this year," Li Zhuhang, General Manager of BYD's auto export division, told the Global Entrepreneur magazine.

Li said the company is building a distribution network in Los Angeles. They will eventually extend the e6's distribution to San Francisco, and finally to Seattle, Chicago, New York and Boston. No specifics or timetables have been announced.

In addition to a shortage of recharging facilities, the e6 is under strict scrutiny based on its security and quality. BYD has yet to complete certain tests, which could take several years to finish.

Despite widespread skepticism, Li said the e6 meets the laws and regulations of the U.S. market. BYD is confident the vehicle will pass U.S. crash safety tests because the Chinese automaker designed the e6 using the strictest standards it could find in China, the United States and Europe. The company designated a special team in Shenzhen to test their products in accordance with U.S. standards on certain technologies.

Battery-powered ambition

Like many Chinese manufacturers, battery maker BYD has successfully slashed production costs and overcome its Japanese rivals by creatively replacing the latter's capital-intensive, fully automated production with labor-intensive, "man plus machine" semi-automatic production.

While BYD began to apply this approach to the production of more sophisticated cars and battery packs designed for electric vehicles, the method produced less than desired results.

"The current obstacles are mainly technical," Li said. A battery pack, usually comprising 100-200 cells, demands performance consistency of all cells. The worst cell will determine the efficiency of one single pack.

According to a report released during the auto show by the Boston Consulting Group, it will be difficult for electric vehicles to attract more customers if no breakthrough takes place in battery technologies. Costs of electric cars will remain high and only a small number of people will be able to afford an electric car, the report said. Pure electric cars would account for 2.8 percent of the global auto market, while hybrids and range-extended electric cars accounted for 23 percent by 2020, according to the report.

For similar reasons, BYD postponed plans to sell its F3DM hybrid to individual buyers in the domestic market. While U.S. sales of the world's most popular hybrid, Toyota's Prius, reached 75,000 in the first seven months of 2009, BYD has sold a little more than 100 F3DM and those were only purchased by governments, enterprises and organizations at home since its debut at the end of 2008.

Wang admitted production costs for batteries in BYD's electric cars still remain high during the Detroit auto show. But costs are expected to decrease, as production multiplies and more stations are built to use BYD's batteries for storage, he said.

"The advantage of electric vehicles will increase if gasoline prices continue to increase in the future, [assuming electric costs remain stable]," Wang said. "It's widely believed if oil prices exceed $120 per barrel, customers will have to turn to electric cars for the sake of saving on transportation expenses."

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