BYD Set For Charge From New Incentives 中国刺激新举措或有助比亚迪
As China’s auto world buzzes with excitement this week on news that Beijing will soon take steps to boost the struggling sector, my attention has turned to an element of the reports that could bode especially well for struggling BYD (HKEx: 1211; Shenzhen: 002594), which has placed a major bet on the difficult new energy vehicle space. At the same time, BYD, which is 10 percent owned by US billionaire investor Warren Buffett, has issued an unrelated announcement that could be cause for concern about an accident involving one of its electric vehicles, reflecting just one of the many uncertainties for this newly emerging technology. Let’s look at the bigger car story first, which has Beijing saying it will roll out new incentives later this year to boost car sales that have fallen from strong double-digit growth rates in 2009 and 2010 to very slow or no growth at present as China’s economy slows. The reports say that new incentives will target more energy efficient cars, as part of a broader national drive to cut back on China’s soaring energy consumption. (English article) But the detail in the reports that caught my attention was one buried in the middle of the China Daily’s story, saying one of the plan’s first steps will be to promote the purchase of new energy buses in large and medium-sized cities. The article says rental companies will also receive strong incentives to purchase big fleets of alternate energy cars. (English article) Both of those moves are smart because they target big vehicle owners that have the money to spend on necessary charging and maintenance infrastructure needed to make new energy vehicles attractive. That’s an important distinction with many of the previous incentives that have been targeted at ordinary consumers who are more reluctant to buy new energy cars due to worries about lack of such infrastructure. BYD’s home city of Shenzhen has already invested heavily in such programs, including rolling out experimental fleets of electric and hybrid buses and taxis. The mandate for more cities to buy new energy buses should mean lots of new business for BYD, as local governments are usually some of the biggest supporters of directives from Beijing, since local politicians want to please officials in Beijing. It’s less clear if rental car companies will embrace alternate energy vehicles under these new incentives, but many may at least buy small experimental fleets to see how they work. Meantime, BYD has also put out an interesting announcement detailing a high-speed accident in which one of its electric taxis in Shenzhen caught fire after being hit by another car and crashing. (company announcement) The fact that it issued the announcement means there’s clearly concern about this case, as obviously fire is one of the biggest dangers with this new technology that involves power generation through massive batteries. BYD does its best in the announcement to try to ease those concerns, and its points do look reasonable. Still, this kind of accident will do little to ease public concerns about new energy vehicles, making it that much more difficult for them to gain broader acceptance.
Bottom line: Beijing’s latest efforts to encourage new energy vehicle buying could benefit BYD by prompting more cities to buy the company’s new energy buses.
Related postings 相关文章:
◙ BYD Sputters Back to Life 比亚迪新车型助其重整旗鼓
◙ Car Sales: Domestics Down, But Not Out 汽车销量：国产车下降，接近拐点
◙ BYD’s New EV Plan: Hook Them With Investment 比亚迪拉美电动车之路堪忧
