In what it is touting as “America’s Largest Electric Bus Order,” BYD Co. Ltd., the Chinese battery and vehicle-maker that is 10% owned by Berkshire Hathaway, has scored a massive order from the state of Washington.
BYD has won a contract from the Washington State Department of Transportation (WSDOT) for up to 800 heavy duty buses from all different propulsion types that includes 12 different categories for all-electric buses.
The company won contracts in 10 of the 12 available vehicle categories of WSDOT’s RFP, and says it has the ability to deliver any of their buses within six months.
The contract includes buses from 30 – 60 feet in length for both highway and transit applications, as well as long-range and shorter range on-route charging configurations.
BYD is the only company world-wide that manufactures 7 different all-electric buses capable of long range as well as in-route charging configurations.
The company notes that its buses can drive for more than 155 miles even in heavy city traffic on a single charge, and BYD will also supply wireless on route charging as an option approved by WSDOT.
The buses use BYD’s Iron-Phosphate battery which has a 12-year-battery warranty, and use the company’s proprietary in-wheel hub motors and regenerative braking system.
Single RFP Process Speeds Procurement
The single WSDOT RFP speeds procurement, and the buses will serve public transportation systems in the states of Washington and Oregon without their having to go through a separate RFP.
Any transit agency or public institution in the states of Washington and Oregon is now able to procure electric buses using the RFP.
“Our staff has spent the past few years researching every electric bus on the market,” said WSDOT’s David Chenaur, Capital Programs Manager, “and after rigorous evaluations of each manufacturer and their products we believe we have given our transit authorities the very best electric buses in each vehicle category to build their fleet with.”
BYD’s subsidiary BYD Motors will build the buses at its plant in Lancaster, California.
In 2008, Berkshire Hathaway bet on BYD’s potential and purchased 225 million shares, and today owns roughly 9.1% of the company.
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.
Berkshire Hathaway has revealed that it now owns more than ten-percent of refiner Phillips 66 (PSX).
In early 2014, Berkshire swapped a large portion of its previous Phillips 66 position for the Houston-based company’s chemical business unit, which was added to Berkshire’s specialty chemical maker Lubrizol.
“We were able to do that on a tax-advantage basis. We didn’t trade them because we didn’t like the stock,” Warren Buffett said on CNBC’s Squawk Alley.
“I had always intended on coming back in, assuming that the price was right.”
A Surprise Revealed
In its SEC Form 13F filing on July 31, 2015, Berkshire stated that “confidential information has been omitted from the public Form 13F report and filed separately with the U.S. Securities and Exchange Commission,” which implied that the company was amassing shares in a company that it would reveal at a later date.
Berkshire, in its SEC Form 3 filing on August 25, stated it had accumulated 54,800,415 shares of Phillips 66 common stock. The position is worth aproximately $4.5 billion, and including shares owned prior to July 31, Berkshire owns 58 million shares.
51,873,456 of the total reported securities are owned by National Indemnity Company, a subsidiary of Berkshire Hathaway, and no price for those shares was reported.
However, 6,102,000 of the total reported securities are owned by the following pension plans of Berkshire’s subsidiaries: FlightSafety International Inc. Retirement Income Plan (350,000), Fruit of the Loom Pension Trust (921,300), GEICO Corporation Pension Plan Trust (2,499,700), Johns Manville Corporation Master Pension Trust (2,187,000), and General Re Corp. Employee Retirement Trust (144,000). The purchase price of those shares ranged from $71.56-$77.26.
About Phillips 66
Phillips 66 was spun-off of ConocoPhillips in May 2012, and its refining and petrochemical business has been mostly immune to the downward pressure on oil prices, as the demand for refined products, including gasoline, diesel and aviation fuel remains strong. Phillips 66 also transports crude oil, refined products, natural gas and natural gas liquids (NGL). It gathers, processes and markets natural gas and NGL to power businesses, heat homes and provide feedstock to the petrochemical industry.
The company’s 52-week share price high was $87.98, and it currently pays an annual dividend of 56 cents, yielding 2.9%.
Buffett, Combs or Weschler
Berkshire does not normally announce which transactions are the work of Warren Buffett, and which transactions are the work of his two portfolio managers Todd Combs and Ted Weschler. While Warren Buffett has acquired most of Berkshire’s portfolio, Todd Combs and Ted Weschler each manage a portfolio that is roughly $9 billion in assets. The two investment managers are widely assumed to be the future managers of the entire portfolio.
The total portfolio slipped to a market value of $107.182 Billion at the end of second quarter from $110.776 billion at the end of the 1st quarter 2015.
(This article contains updated information from when it was first published.)
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.
There was a time when cities were very pleased with adding hybrid buses to reduce emissions from smoky diesel buses. These days, the mantra is zero-emissions, as cities work to meet tougher pollution and climate change goals. These goals benefit BYD Co. Ltd, the Chinese company that is a world-leader in rechargeable batteries, and maker of pure-electric and traditional fuel vehicles.
The company, which is partially-owned by Berkshire Hathaway, continues to make inroads in the U.S. market with its all-electric buses.
In Denver, Colorado, the Regional Transportation District (RTD) has approved the purchase of 36 of BYD’s 45-foot pure-electric buses for its 16th Street Mall shuttle, which is the RTD’s busiest bus route.
The buses replace a more than decade-old fleet of hybrid buses, which are aging out of service. The new buses will eliminate emissions on the heavily travelled route.
The RTS is spending $27.1 million to purchase the buses, which will have a 12-year lifespan.
BYD has been begun assembling its buses for the U.S. market in a plant it opened in Long Beach, California. The company is already making pure-electric buses for Long Beach’s transportation system.
In 2008, Berkshire Hathaway bet on BYD’s potential and purchased 225 million shares, and today owns roughly 10% of the company.
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.
It’s summer and BYD Company Limited’s car sales are heating up, even as some major car companies have wilted.
While everyone watches Tesla and Nissan to get the pulse of EV car sales, Chinese car-maker BYD has quietly topped their world-wide sales figures for June and July.
BYD, which Berkshire Hathaway holds a minority stake in of nearly 10%, reported selling 5,037 EVs and PHEVs in June 2015.
Nissan’s U.S. sales have been particularly soft, reporting selling only 1,174 of its Nissan LEAF EVs in July, a number that is roughly a third of the 3,019 it sold in July 2014.
Tesla, which reports its sales on a quarterly basis, reported that 11,507 of its Model S were delivered worldwide in April-June. The figure was up 52% for the same period in 2014.
Why the Lack of Attention?
BYD, which is the world-leader in rechargeable batteries, has yet to enter the U.S. car market with either its all-electric or hybrid vehicles. In the U.S., the company has focused on the battery-powered zero emission bus market, winning contracts in San Diego and Long Beach, California. The company has built a factory to build the buses in Long Beach.
However, BYD is inching toward car sales. In the spring of 2015 it began a pilot program with Uber in Chicago that used BYDs E6 sedan. The car is a cross between a sedan and SUV, and currently gets roughly 186 miles (300 km) of driving range per charge. The 2016 E6 will reportedly get a range increase to 250 miles (400 km).
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.
Berkshire Hathaway’s Form 13F filing, which is required to be filed quarterly with the Securities and Exchange Commission, always give plenty to chew on for Berkshire watchers.
On the surface it has been a relatively quiet 2nd quarter 2015 for much of its minority-share stock holdings, with its purchase of a large number of shares in Charter Communications one of the few major increases.
Steady as She Goes
Berkshire’s four biggest holdings all remained unchanged, with Wells Fargo making up 24.68% of the total portfolio, Coca-Cola 14.64%, IBM 12.07%, and American Express 10.99%.
In the case of Coca-Cola, the $518 million in dividends it received in 2014, on a very low cost basis, meant an effective yield of 40%, so no wonder Warren Buffett calls Coca-Cola one of his “forever stocks.” You would drink five Cokes a day too if it got you a 40% return.
A Surprise Coming Soon?
The company did note that “confidential information has been omitted from the public Form 13F report and filed separately with the U.S. Securities and Exchange Commission,” which likely implies that the company is amassing shares in a company, and in such a case it is not required to reveal the company publicly. Berkshire used the same strategy when it took a position in IBM that made it the company’s largest minority-owner with just over 8% of the company. We will have to wait and see if there is another surprise minority-ownership company bombshell, however we do know that the purchase was in the $3 billion range.
Stocks on the Increase
Berkshire bought 2,535,542 shares of the cable TV operator Charter Communications, increasing its position by 42% to 8,514,678 shares. The position is 7.6009% of Berkshire’s total portfolio.
Berkshire first took a position in Charter Communications during the 2nd quarter of 2014. The company has been on the rise since emerging from bankruptcy in 2009, and is in the process of merging with Time Warner Cable Inc. and acquiring Bright House Networks, a video service provider and cable internet provider. The merger is the work of Chairman John Malone whose Liberty Broadband is the largest Charter Communications shareholder. Berkshire has long been a buyer of shares in Malone’s companies, although in 2014 it sold its entire stake in premium cable channel Starz.
A Stock That’s Paying Dividends
Berkshire also increased its position in U.S. Bancorp by 1,289,777 shares, an increase of 1%, bringing its total to 85,063,167 shares. The position is 4.7538% of Berkshire’s total portfolio.
While Berkshire is famous for being the stock that doesn’t pay a dividend, it certainly loves to receive them, and U.S. Bancorp has been one of the stronger stocks in the banking sector for dividends. The company announced a 4.1% dividend increase in June, the 5th consecutive dividend increase since 2011.
A Potential Lubrizol Acquisition?
Also reported were the 20,000,000 shares of Axalta Coating Systems that it bought from the Carlyle Group for $28 per share. Berkshire first announced plans for the purchase in April, and the big question is whether the former DuPont unit is an acquisition target for Berkshire Hathaway’s Lubrizol Corporation. The $28 price was below the $31.30 share price that Axalta was trading at after the announcement. It now sits at $30.38 as of Friday’s closing bell.
Another Potential Takeover Candidate
DaVita Healthcare Partners, which also looks like a good fit with Berkshire, considering that an aging population and increased health care coverage under the Affordable Care Act benefits its kidney dialysis business, was unchanged at 38,565,570 shares.
Berkshire entered into a standstill agreement with Davita in May 2014, pledging not purchase more than 25% of the company. Its ownership stake currently sits at just under 17.95%.
And One That’s Not So Likely, Yet
The 13F filing does not yet reflect Berkshire’s 26% ownership of Kraft Heinz, which closed after the quarter ended. The filing does show that Berkshire owned 578,000 shares in snack maker Mondelēz International, Inc., which has recently been rumored as a possible merger candidate with Kraft Heinz. Warren Buffett just last week downplayed the possibility, noting that there was still much worked to be done in integrating Kraft and Heinz.
Stocks on the Decrease
Major decreases in holdings, included bailing on energy sector stocks Phillips 66 and National Oilwell Varco. Berkshire sold its entire 7,499,450 position in Phillips 66, and its entire 1,978,895 position in National Oilwell Varco. Both have been hit hard by low oil prices.
Berkshire had already liquidated most its Phillips 66 position in 2014 when it swapped it for ownership of Phillips Specialty Products Inc. and approximately $450 million in cash. The move brought tax saving to Berkshire and a new unit to Lubrizol.
Whither Viacom
Also going down were Berkshire’s shares in Viacom, Chicago Bridge & Iron Company, and WABCO Holdings Inc.
Its Viacom position decreased a whopping 31% as Berkshire sold 2,618,358 shares. Berkshire looks to be wise to get out of Viacom as fast as it can. The mass media company has seen its stock value plummet 42% year to date, as it struggles to hold on to viewers and carriers of its channels. Among its troubles, Viacom is in a battle with satellite TV provider Dish TV, which has dropped the company’s channels from its service.
Berkshire’s holdings in Chicago Bridge & Iron Company decreased 12% as it sold 1,374,189 shares. Berkshire first took a position in the engineering, procurement and construction company during the 1st quarter of 2013 only to watch the share price peak at $86.50 in April 2014 before crashing all the way down to $34.51 a year later. Year to date the stock has risen $23.25% but it appears that Berkshire has now cooled on it as an investment.
Buffett, Combs or Weschler
Berkshire does not normally announce which transactions are the work of Warren Buffett, and which transactions are the work of his two portfolio managers Todd Combs and Ted Weschler. However, Buffett recently revealed that Berkshire’s 2.9% position in aerospace manufacturer Precision Castparts was originally purchased by Todd Combs. It was Buffett that decided to make the bid to purchase the entire company for $37 billion.
While Warren Buffett has acquired most of Berkshire’s portfolio, Todd Combs and Ted Weschler each manage a portfolio that is roughly $9 billion in assets. The two investment managers are widely assumed to be the future managers of the entire portfolio.
The total portfolio slipped to a market value of $107.182 Billion from $110.776 billion at the end of the 1st quarter 2015.
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.
In a consolidation in the insurance industry, Berkshire Hathaway’s minority position in Symetra Financial Corporation will be bought out as the insurance company merges with Sumitomo Life Insurance Company.
A Big Win for Berkshire
The merger will give Berkshire a 32% boost on its Symetra stake, as it receives an all cash offer for its shares. The tender offer will give Berkshire a windfall worth $144 million.
Berkshire and other Symetra shareholders will receive $32.00 per share in cash at closing, plus a previously announced special dividend of $0.50 per share in cash, which is payable on August 28, 2015 to Symetra shareholders of record as of August 10, 2015.
The total combined transaction consideration of $32.50 per share is approximately $3.8 billion in aggregate and represents a 32% premium over Symetra’s average stock price of $24.64 for the 30 days ending August 5, 2015.
Berkshire Hathaway currently owns 17% of Symetra and has agreed to vote in favor of the transaction.
White Mountains Insurance Group, Ltd., which owns 18% of Symetra, has also granted its approval for the merger.
Best Wishes, Warren
Warren Buffett in a statement said, “Tom and his management team have done a good job running the company and have executed a great deal for shareholders. I wish them the best for future success under their new owners.”
Founded in 1907, Sumitomo Life provides traditional mortality life insurance, nursing care, medical care and retirement plans through sales representatives, insurance outlets, the Internet and bancassurance. As of March 31, 2015, Sumitomo Life had $229 billion in assets, approximately 6.8 million customers and 42,000 employees.
Symetra was founded in 1957 and is based in Bellevue, Washington. The company provides employee benefits, annuities and life insurance through a national network of benefits consultants, financial institutions and independent agents and advisors. As of June 30, 2015, Symetra had $34 billion in assets, approximately 1.7 million customers, and 1,400 employees nationwide.
Symetra will become Sumitomo Life’s platform in the U.S., where Sumitomo Life does not currently have a material operational presence. Symetra’s President and Chief Executive Officer, Thomas M. Marra, and the current management team will continue to lead the business from Symetra’s headquarters in Bellevue. Symetra will maintain its current brand, employees, distribution channels and product mix.
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.
Now that Kraft is part of Kraft Heinz, the aggressive cost cutting that 3G Capital brought to Heinz has come to Kraft as well. Gone are the days of a host of perks, including a free supply of Kraft snack foods for employees, or even minifridges in the office.
It’s no surprise, as 3G is known for imposing cost controls big and small that include cuts to travel expenses, limits on the number of printer copies that can be made each month, the elimination of snacks in break rooms, and new mandates on cutting electricity usage.
The same goes for personnel, and 3G has already begun trimming and replacing employees, including the departure of Kraft’s Chief Financial Officer James Kehoe.
What Do Warren and Charlie Think?
While 3G’s ruthless cost-cutting has dismayed some Berkshire shareholders, it has not offended either Warren Buffett or Charlie Munger, who see it as necessary to keep complacent, century-old companies competitive in the modern world. After all, layoffs were in Berkshire Hathaway from the start, as Buffett fought to keep the failing textile company afloat.
At the 2015 Berkshire Hathaway annual meeting both Warren Buffett and Charlie Munger strongly supported 3G’s strategy.
“3G has been buying businesses that have too many people,” Buffett explained. “You will have never found a statement from Charlie or me saying that a business should have more people than needed,” Buffett added.
The cost cutting has also pleased Wall Street, as shares of Kraft Heinz (KHC) are already up roughly 9% since their trading debut on July 7.
Berkshire’s move to partner with 3G, which combined own 51% of Kraft Heinz, with Berkshire the largest single shareholder at 26%, has been a very profitable way for Berkshire to put its mountain of cash to use. Andrew Bary of Barron’s calculated that Berkshire’s $9.25 billion investment in Heinz and Kraft are now worth $16 billion. He called it “a stunning profit in just two years.”
With 3G also having turned to Berkshire for cash to finance its Burger King takeover of Tim Hortons, a move that has gave Berkshire 8% of the combined company, it looks like Buffett’s and Munger’s interest in 3G’s management style is growing not waning.
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.
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.
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.
While Tesla has grabbed major headlines the past few years, China’s BYD Company Limited has grown from just 20 employees in 1995 to over 190,000 today, and in the process become the world’s largest rechargeable battery supplier.
The company has some 16,000 R&D engineers.
In 2015, BYD jumped to number one in worldwide EV sales thanks to the popularity of its Qin sedan and Tang SUV, beating Nissan, Tesla, Volkswagen and Toyota.
The growth directly benefits Berkshire Hathaway. In 2008, Berkshire Hathaway bet on BYD’s potential and purchased 225 million shares for $230 million, and now owns roughly 9.1% of the company.
Today Berkshire’s stake in BYD is worth roughly $1.77 billion.
Like Tesla, BYD is both an automaker and a battery maker. The company purchased Xi’an Tsinchuan Auto Co., Ltd. in 2003 and has aggressively pursued both the auto and bus businesses.
Unlike Tesla, BYD manufactures both gasoline-powered and electric cars, including traditional fuel cars, dual mode electric cars, and electric-only cars and buses. BYD has jumped into the EV market with a broad range of vehicle types, including the bus, coach, taxi, private car, urban logistics truck, sanitation truck and construction truck (concrete mixer); and 4 specific off-road vehicles for use in the warehouse, airports, ports and mining.
Pure Electric Buses
It is in the bus market that BYD is making rapid progress. BYD’s zero-emission pure electric buses have already been deployed in Brazil, China, Columbia, England, India, Malaysia and Thailand.
Air pollution and carbon emissions are the key drivers of the move to pure electric buses. In China, diesel buses make up just 10% of the vehicles on the road but contribute over 30% of city air pollution and GHG emissions.
In January 2018, BYD reached a new milestone with the completion of its 50,000th battery-electric bus.
BYD’s C9, is a two-axle, 40′ coach with the seating capacity to carry 47 people at highway speeds for over 190 miles. The buses use an iron-phosphate battery that after 10,000 charge cycles will still retains 70% of its capacity.
Its largest bus, the K10A, is a 15-meter bus that seats 95 passengers, and is now in service in São Paulo, Brazil.
London saw its first pure electric zero emission double decker bus debut in October 2015, and a fleet of 51 single-deckers debuting in the fall of 2016.
As BYD looks to pure electric bus sales across Europe, it has announced a €20 million investment in a bus assembly plant in the northern Hungarian city of Komárom. The Hungarian plant will begin production in the first quarter of 2017, and will have its own R&D center and battery test facility.
In the U.S. market, BYD has primarily focused on bus sales,becoming the dominant player in the electric bus market. It built a massive 450,000 sq. ft. assembly plant in Lancaster, California.
BYD’s e-buses operate in transit agencies, universities and airports across North America, with more than 40 customers including LA Metro, Los Angeles Department of Transportation, Stanford University, UCLA, UC San Francisco, UC Irvine, Anaheim Resort Transportation, Long Beach Transit, Denver Regional Transportation District, City of Albuquerque, SolTrans, SunLine Transit, Link Transit, COMO Connect, Antelope Valley Transit Authority, and many others.
In the spring of 2015, it also announced a pilot program with Uber in Chicago that uses BYDs E6 sedan. The car is a cross between a sedan and SUV, and currently gets roughly 186 miles (300 km) of driving range per charge. The 2016 E6 will reportedly get a range increase to 250 miles (400 km).
BYD’s biggest breakthrough in the U.S. market came in September 2015, when it won a contract with the Washington State Department of Transportation (WSDOT) for up to 800 heavy duty buses from all different propulsion types that includes 12 different categories for all-electric buses. The buses will serve public transportation systems in the states of Washington and Oregon.
The Explosive Growth of Pure Electric Vehicles in China
In China, it took ten years to go from zero electric vehicles to 1%, but it may take only another five years to reach 10%. In 2018, EVs rose to 3.3% market share.
And, even more amazing is that sales of new energy vehicles in China are projected to hit a whopping 30% by 2025.
BYD sold a total of 520,687 vehicles in 2018 in China alone, of which some 280,000 were pure electric cars.
Strength Around the Globe
While Tesla has struggled in China, laying off 30-percent of its workforce in March 2015, and has its goal of manufacturing in China still on the drawing board, BYD is already a major player. BYD not only has a factory in Shenzhen, but has captured half of the electric car market. Its home field advantage has it selling over 6,000 of its popular stylish QINs per month.
BYD is also having an easier time in emerging markets. It is opening a factory in Brazil by the end of 2015, and is using its strength in pure electric buses as its way to enter the market. What’s more, it beat all U.S. car manufacturers to the Cuba market. In July 2015, the company inked a deal with the Cuban government for the purchase of 719 vehicles to be the first fleet of tourist rental cars. The cars will be traditional fuel vehicles but will give BYD a major foothold in the country, and they are already planning to introduce electric vehicles, and move beyond tourist car rentals to government official vehicles and the nascent private car market.
In September 2015, BYD had its first substantial sale in Africa, signing a deal to sell 10,000 vehicles to Sudan’s state-run company GIAD Motor Co Ltd.
The 7+4 Strategy in Australia
BYD’s comprehensive “7+4” electrification strategy in the Australia region aims at electrification of all forms of ground transportation: urban bus, coach, taxi, passenger car, urban logistics trucks, construction trucks, and urban sanitation trucks (7), as well as vehicles for warehousing, mining, airports and ports (4).
In 2016, the BYD e6 taxi got the green light to access the Australian market becoming the first Chinese made electric vehicle to be certified by the Australian Design Rules (ADRs), the country’s stringent technical standards for emissions, vehicle safety and theft resistance.
The company was already in the Australian market with its pure electric buses in a shuttle service tested for Sidney Airport between December 2014 and May 2015, and it has also sold its pure electric forklifts in Sydney and Melbourne.
A Willing Partner
BYD’s technology makes it an excellent partner with other manufacturers, as cities around the world race to meet ambitious climate change and pollution goals.
In July 2015, BYD signed a deal worth $29.6 million deal with British bus manufacturer Alexander Dennis Limited (ADL) to build 51 single-deck zero-emission buses for London. The buses utilize BYD’s chassis and electric drivetrain with the bodies supplied by ADL. The first 51 buses went into service in September 2016, following a three-year trial that proved the buses could consistently run a 16-hour shift without a recharge. The partnership helps London move towards its goal of having all single-deck buses totally emission-free by 2020.
“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,” said Isbrand Ho, managing director of BYD Europe.
Innovative Mass Transit Solutions
While Elon Musk touts the future prospects of hyperloops in dealing with future transportation needs, Chinese competitor BYD Co. LTD. is looking towards an existing mass transit technology, the monorail, as part of its answer to urban congestion issues. In October 2016, the company debuted its “SkyRail” monorail system in Shenzhen, China.
With a capacity of between 10,000 to 30,000 passengers an hour (each way) and a high speed of up to 80km/h, SkyRail is part of BYD’s focus on the development of layered rail transport that meshes with metro and bus systems. BYD refers to “three-dimensional green traffic” as part of its green mobility platform.
Dramatic Cost Savings Compared to Subways
The electric monorail is a kind of traffic network which interconnects multiple transit backbones in the city at one sixth of the cost of a subway system.
According to BYD, the total market for monorails just in China is in the range of 3 trillion yuan ($450 billion).
BYD’s 4.4 kilometer monorail line at its Shenzhen Headquarters alleviates the traffic problems of 50,000 factory and management employees.
The first commercial sale of BYD’s SkyRail will be to S. Korea.
BYD’s B-Boxes and Vehicle Emergency Power Supply
Like Tesla, BYD has jumped into the home power storage business. The battery maker’s B-Boxes consist of fire-safe, long-cycle Iron-Phosphate rechargeable batteries that perform the same function as the Tesla PowerWall Battery. BYD’s B-Boxes are already on sale in many European countries including Germany, UK, Italy, Spain, as well as in Australia and Africa.
In a move that puts it ahead of Tesla, BYD’s Qin EV300 and e5 cars are equipped with BYD’s signature VtoL function, in which the vehicle serves as a massive mobile electricity supply to power appliances like cookers, refrigerators, power tools and many others, so that users can rely on the vehicle to plan outdoor activities that depend on electricity, or in case of emergencies like power cuts or blackouts.
Berkshire’s BYD Investment
Despite Berkshire Hathaway’s reputation for avoiding high-tech investments, its stake in BYD, like its more recent stake in eVolution Networks, shows Berkshire is not going to be left out of companies on the cutting edge of technology.
(This article contains updated information from when it was first published.)
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.