BYD Co., the Chinese auto maker part-owned by one of Warren Buffett's companies, is likely to choose the Los Angeles area as the lead market for the electric car it plans to start selling in the U.S. late next year, a senior executive said.
BYD is also leaning toward choosing the West Coast metropolis as home to its U.S. headquarters for the auto business, Henry Li, a BYD senior director in charge of its auto business outside China, said in an interview Wednesday. Mr. Li said an official decision has not been made, but the Los Angeles area is "at the top of the list" and is likely to be chosen. The Los Angeles area is attractive because electric cars are "most suitable for densely populated areas with lots of air pollution problems," and because the region is one of the largest and wealthiest car markets and is known to be the leader in adopting new technologies, the executive said.
California is shaping up as a central battleground for electric vehicle launches next year. General Motors Co. said earlier this month it will focus on California for the Volt, a heavily electrified, plug-in hybrid car. Coda Automotive, a California-based start-up, is also targeting southern California for the planned launch by late next year of a $40,000-plus all-electric battery compact sedan, to be built in China using Chinese lithium-ion battery technology. Japan's Nissan MotorCo. is also putting the finishing touches on plans for the launch of its all-electric Leaf model in the U.S. and Japan by end-2010, although it hasn't said yet where it will focus initially.
BYD's U.S. launch is being watched in the industry as a test of the global ambitions of China's auto sector to use electric-vehicle technology to close the distance with more established car makers. It has said that it plans to sell the all-electric, battery-powered e6 model for slightly more than $40,000 – competitive with some bigger rivals. The company wants to build a beachhead on the West Coast to tap American consumers' growing appetite for fuel-efficient cars much like Japanese auto makers did decades ago.
Mr. Li said that to pick the lead market for the five-seat e6, BYD has spent the past couple of years talking to different local governments to discern their attitudes toward clean-energy vehicles, and what kinds of incentives or other support they might offer for the industry.
BYD plans initially to make the e6 available only to fleet customers in the U.S., like utilities, and will sell it directly to them instead of using dealerships, "most likely through some type of lease program," Mr. Li said. BYD plans to develop a dealer network later, as it makes more products available in the U.S.
BYD plans to later expand e6 sales north to San Francisco and eventually to further cities like Seattle, Chicago, New York and Boston, Mr. Li said, without specifying a timetable. "Any of those markets is our potential market," he said, adding that BYD also wants to expand its product offerings to include other new-energy cars as well as gasoline-fueled cars.
BYD Chairman Wang Chuanfu said in an interview in August that the company wants to use the e6, one of its most advanced cars, to build its brand name in the U.S. He said the company will target government agencies, utilities and "maybe some celebrities" as potential customers. BYD hopes to enter Europe with a similar strategy in 2011 or later.
The Chinese company's ambitions face challenges. It is still awaiting approval from China's government to begin selling the e6 in its home market. And it remains unseen whether the e6 will satisfy finicky U.S. customers.
The technology chief of one global auto maker who recently drove an e6 told The Wall Street Journal that he thought the car drove "rough," with "squishy" handling, and that it needed more refinement.
Mr. Li said any early evaluation of the e6's performance is meaningless since it would be based on test drives of an early prototype of the car. "Obviously we're improving the car everyday," he said.
