Berkshire Hathaway’s roughly 10% ownership in BYD Company Limited, the Chinese automobile and new energy company that is the largest supplier of rechargeable batteries in the world, makes the company especially worth watching for Berkshire shareholders.
In 2008, Berkshire Hathaway placed a major bet on BYD’s potential when it purchased 225 million shares, and the company has not disappointed as it has aggressively moved into new markets.
A Willing Partner
While Tesla has mostly gone it alone, BYD not only manufactures its own line of cars and buses, but it is willing to form manufacturing partnerships that give it entry into new markets.
The key is BYD’s electric vehicle technology that makes it an excellent partner for other manufacturers looking to meet ambitious climate change and pollution goals.
On July 27, 2015, BYD announced a joint project worth $29.6 million deal with British bus manufacturer Alexander Dennis Limited to build 51 single-deck zero-emission buses for London. The buses will utilize BYD’s chassis and electric drivetrain with the bodies supplied by ADL. The partnership helps London move towards its goal of having all single-deck buses totally emission-free by 2020.
“This combination will deliver a unique vehicle which we believe will have a strong appeal in London and elsewhere in the UK,” said Isbrand Ho, the managing director of BYD Europe.
The buses will run on two routes served by London bus operator Go-Ahead London, and are scheduled to be in service by August 2016.
“Working together with our partners and friends at ADL we can provide a truly optimized blend of expertise. Our deep experience of not only battery technology but the critical battery management systems and driveline components necessary to deliver unequaled range and reliability are matched to ADL’s strong track record in building low weight, attractive and durable buses,” Ho said.
“We are delighted to have placed this order with BYD and have every confidence that along with ADL. They will deliver the world’s most advanced, zero-emission, pure electric bus fleet, and one that will match the rigorous demands of the London operating environment. This is a considerable step towards a cleaner, greener London bus fleet,” noted Richard Harrington, engineering director of Go-Ahead London.
For More on BYD, read the Special Report: BYD, Berkshire’s Tesla.
© 2015 David Mazor
Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.