BYD To Build Only Electric Cars, End Production Of Gasoline Cars?

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Chinese battery electric crossover: BYD e6 test drive, Los Angeles, May 2012

Chinese battery electric crossover: BYD e6 test drive, Los Angeles, May 2012

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Chinese automaker BYD, or 'Build Your Dreams', could be on the verge of abandoning convenionally-fueled car production in favor of electric vehicles.

Already known for electric vehicles like the e6 crossover, BYD is aiming for a "re-birth" plan to counter a recent slump in sales.

Reuters reports the Chinese company, which is part owned by entrepreneur Warren Buffett, could stop making gasoline vehicles within the next two years.

BYD's net profit has collapsed in recent years, from $61.1 million four years ago to only $13.1 million last year.

Recently the Chinese firm attempted to break into the U.S. market, a plan that has so far failed to materialize, despite assertions the automaker would start by delivering vehicles to the fleet market. A series of other challenges have seen BYD in the news for all the wrong reasons. Despite big plans for the e6, it has been relegated to taxi and rental car status.

One un-named BYD executive told Reuters, "The last three years have been tough, and painful at times. Everybody beat us up. A lot of long-term investors and friends of the company lost patience with us."

BYD's business interests are wide-ranging, manufacturing everything from batteries for personal electronics, through LED light bulbs, solar panels, and electric and gasoline cars and buses.

The company's solar arm could be sold on, and its increasingly uncompetitive gasoline-powered vehicles would face the chopping block. BYD is expected to unveil its Green Hybrid Technology when this week's Shanghai auto show begins on Saturday, so hybrid models are likely to get a stay of execution.

While full battery-electric cars are doing poorly in China, BYD says this is where its true experience lies, and has the technology to make it work--though such a plan is still incredibly risky in the short term.

Yale Zhang, head of Shanghai-based consulting firm Automotive Foresight, said "They either know something we don't or they're actually going to take a long time, over 5-10 years, to make this radical transition so that there's little risk."

That risk is multiplied if China's government stalls over the possibility of big incentives for electric and hybrid vehicles.

And like electric vehicle companies elsewhere are starting to realize, the real key is to build a product that people want to buy. In China, where electric car sales have not yet taken off, that might not be such an easy goal.

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