REUTERS: BYD says open to licensing car batteries

Friday, November 20, 2009

REUTERS: BYD says open to licensing car batteries

By Chang-Ran Kim and Kevin Krolicki

DETROIT, Jan 11 (Reuters) - China"s BYD Co (1211.HK) is open to licensing its low-cost ferrous-iron electric car battery and has had interest from Japanese, European and U.S. carmakers, its chairman said on Sunday.

"We would consider it, and many have shown interest in cooperating in the field," Wang Chuan-Fu, chairman of the Hong Kong-listed battery maker, told Reuters in an interview on the sidelines of the Detroit auto show.

"Right now we"re just limited by resources."

BYD Auto, set up in 2003 by the BYD Group, has used its expertise in batteries to develop rechargeable electric vehicles that it expects to eventually compete with General Motors Corp"s (GM.N) and Toyota Motor Corp"s (7203.T) proposed plug-in hybrids.

BYD gained international fame in September thanks to a surprise endorsement by billionaire investor Warren Buffett, whose Berkshire Hathaway Inc (BRKa.N), through unit MidAmerican Energy, agreed to buy a 10 percent stake in BYD for $230 million.

The Chinese automaker is aiming to launch a plug-in hybrid model, the F6DM, and the E6 all-electric car, in the United States and Europe in 2011.

Wang said initial sales would include fleet sales to corporations, utilities and municipal governments.

BYD launched the F3 "Dual-Mode", or F3DM model, last month, expecting to sell 50 units to the Shenzhen municipal government and China Construction Bank.

The F3DM, which has a small gasoline engine as a backup power source, is available in 14 Chinese cities at 149,800 yuan ($22,000). BYD plans to expand sales to the mass market in the second half of this year.

BYD is also scheduled to launch the E6 -- its first all-electric car -- in China in the second half of this year.

Both the plug-in hybrid and E6 run on ferrous-iron batteries, which Wang said were safer, more durable and less than half the cost of lithium-ion batteries, which most major automakers are planning to use in their electric vehicles.

The E6, however, requires about 600 kg (1,323 lb) of battery packs, or roughly twice the weight required by the battery in Nissan Motor Co"s (7201.T) prototype electric car.

BUFFETT STAMP

While BYD"s vehicles have yet to be proven for long-term durability or safety, Wang said he aimed to sell BYD"s cars in the United States mostly on the innovative battery and dual-mode hybrid technology rather than on price alone.

Wang also said Buffett"s investment could help speed up BYD"s entry into the United States, where he expected the certification process to take one to two years.

"They could help us in building facilities for charging stations," he said.

Wang said he would be open to MidAmerican Energy"s increasing its stake in the automaker from the current 10 percent.

He said BYD was discussing electric car projects with various governments, including that of Israel, as well as regional authorities in China.

"The Chinese government has been supportive in initiating incentives on detailed levels, at both the federal and regional levels," he said. (Editing by Phil Berlowitz)

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