(BRK.A), (BRK.B)
Bangalore has been dubbed the “Silicon Valley of India,” but it’s also a city choked by air pollution that on some days is twice as bad as Delhi’s notorious pollution. And as much as 20% of the city’s total exhaust is produced by diesel buses.
Those skies took the first tiny step to becoming cleaner, as Chinese battery and vehicle manufacturer BYD Co. Ltd. has sold its first pure-electric bus to the Bangalore Metropolitan Transport Corporation.
“Operating electric buses not only to initialize and support new technologies, shows our respect to the city and urban residents with our social and environmental responsibility,” stated the Transportation Minister.
Although the electric bus comes with a higher initial price tag, officials expressed confidence that the total cost of ownership for the vehicle would make initial investments well-worth the price.
“The list of vehicle benefits is long; including the fact that it is quiet, does not pollute, and has low operational and maintenance costs. The bus has been operating successfully in various European countries besides China,” officials said.
Lower Cost of Fuel
Given the difference of the electricity price and diesel price, the BYD electric bus is not only zero emission but also has higher economic value.
Traditional diesel buses consume 0.55 L of diesel per kilometer in India, but by comparison, BYD’s 40 foot all-electric bus only consumes about 1 Kwh electric per kilometer (with no HVAC). The results are that millions in cost savings can be realized in Bangalore.
Last year, the Indian government reviewed the “national electric vehicle plan (2020)” and announced that India planned to put in place as many as 6-7 million new energy vehicles by 2020. The national heavy industry ministry is responsible for implementing the plan.
“The ambitious plan will promote the development of new energy automobile industry, the industry enterprises with large scale operating experience and strong technical strength, such as BYD will benefit the most,” a Hong Kong based observer said.
BYD and Berkshire Hathaway
In 2008, Berkshire Hathaway bet on BYD’s potential, purchasing 225 million shares, and today owns roughly 9.1% of the company.
For More on BYD, read the Special Report: BYD, Berkshire’s Tesla.
© 2016 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.