BYD Co. (1211), the Chinese automaker partially owned by Warren Buffett’s Berkshire Hathaway Inc. (BRK/A), is preparing to make electric buses in California as the company seeks to bolster its visibility in the U.S.
The company will open facilities in Lancaster, California, on May 1 that will assemble electric buses, Marketing Director Sherry Li said. BYD’s K9, which is 12 meters (39 feet) long, can run 155 miles (249 kilometers) when fully charged, which can take as little as three hours, according to the company.
Production in the world’s largest economy may help BYD, which has had three consecutive annual profit declines, to capitalize on Buy America government provisions that subsidize purchases of U.S.-made products for public transportation projects. Efforts to expand in the U.S. have yet to bear fruit, with revenue in the country accounting for less than 2 percent of its total last year.
“It certainly allows them an opportunity to penetrate into the U.S. market, especially in California, where electric buses are very popular,” said Rebecca Lindland, an automotive consultant with Rebel Three Media & Consultants in Cos Cob, Connecticut. “While strategically it’s a very positive move, it’s very high risk as they don’t have a contract. If they don’t have a contract, it’s certainly a very risky proposition.”
BYD, based in Shenzhen, is betting on public transportation to help boost its electric-vehicle business, though mainly in China. As of last year, 200 of the company’s K9s and 800 of its e6 electric taxis were running on Shenzhen’s roads, according to the company. BYD also has K9 and e6 vehicles in trial operations in Changsha, Xi’an, Shaoguan and Baoji as part of a goal to have its vehicles nationwide.
Outside of China, BYD’s K9 bus is running trials in the U.S., Spain, Hungary, Austria, Belgium and the Netherlands. It has won orders from the Netherlands, Israel, Uruguay, Colombia and Canada. In January, BYD received approvals to sell its electric buses without any restriction in European Union countries, according to the company.
The Wall Street Journal earlier reported on BYD’s plans to begin assembling electric buses in the U.S.
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