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Buffett-Backed BYD Seeks U.S. Electric-Bus Sales as Shares Surge

BYD Co. (1211), the Warren Buffett-backed Chinese auto-and-battery maker, is seeking to increase overseas sales of its electric bus as billionaire founder Wang Chuanfu predicts a “second takeoff” for the company this year.

Shenzhen-based BYD has signed contracts this year to supply a total of 35 K9 electric buses to Long Beach and Los Angeles for use in public transportation. It also won an order in the Netherlands, and began trials in Poland and Canada.
Enlarge image Buffett-Backed BYD Seeks U.S. Electric-Bus Sales as Shares Surge

A BYD Co. electric bus used by Hertz Corp. sits during the grand opening of BYD Co.’s North American headquarters in Los Angeles on Oct. 24, 2011. Photographer: Jonathan Alcorn/Bloomberg
Enlarge image BYD Chairman Wang Chuanfu

Wang Chuanfu, chairman of BYD Co., said BYD will remain in the solar-panel, battery and auto businesses as part of the company’s vision to create a “zero-carbon and zero-emission eco-environmental system.” Photographer: Jerome Favre/Bloomberg
Enlarge image Buffett-Backed BYD Seeks U.S. Electric-Bus Sales as Shares Surge

People stand outside during the grand opening of BYD Co.’s North American headquarters in Los Angeles. BYD said in May that it will build two factories in Lancaster, California to assemble the K9 vehicles and produce the batteries that power them. Photographer: Jonathan Alcorn/Bloomberg

“The K9 is doing well and has good prospects in overseas markets,” Wang, who has an estimated net worth of $2.2 billion according to the Bloomberg Billionaires Index, said in e-mailed comments. “In the future, BYD will closely monitor overseas markets, seek partnership opportunities, and progressively introduce new-energy vehicles to related countries.”

BYD is stepping up its push into overseas markets as Wang completes a three-year restructuring of the company. In that time, profit tumbled 97 percent because of losses at its photovoltaic business, a decline in global battery demand and a slump in vehicle deliveries.

The company’s shares have more than doubled in the past year, as Wang cut the number of dealerships and state incentives helped narrow solar losses. “Electric buses have high margins and selling them overseas will help build and shape BYD’s brand,” said Ricon Xia, a senior analyst with Mitsubishi UFJ Asset Management Ltd. in Hong Kong. Xia doesn’t have a rating on the stock.
U.S. Sales

BYD said in May that it will build two factories in Lancaster, California to assemble the K9 vehicles and produce the batteries that power them. The U.S. sales will mark BYD’s entry into the world’s largest economy, after missing its initial target to start retail sales of its e6 electric hatchbacks in the country by the end of 2011.

In China, BYD’s electric bus is in operation in cities including Shenzhen, Changsha, Xi’an, Tianjin, while 800 of its e6 all-electric cars are used as taxis in its home city.
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