This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

BYD Auto Targets U.S. Debut for 2012

It feels one of the biggest advantages BYD has over other electric car markets is that it's an integrated company which produces batteries as well as the cars. Even though most think of BYD as only a car company, cars are simply one of three main divisions.

It has an equal focus on solar, as well as energy storage. It's that energy storage business in which it develops its battery technology which gets leveraged in its cars. Therefore, it believes it can optimize the cars and batteries together for a better product with better specs and at a better price. Other car companies - take Tesla (TSLA - Get Report) for example - have to use battery suppliers from external suppliers like Panasonic, for example.

BYD has its own battery plant in Shaanxi province. It also has a large solar plant in the same province. It even has a consumer electronics division that isn't connected to autos, solar, or batteries, but which has been showing signs of life lately on the recent strength of Motorola (MMI - Get Report), a big strategic partner.

Despite BYD's Buffett connection and recent success, the stock has many skeptics who think it's overbought at the current levels, even though it's almost half the price of where it was at in the first quarter of 2010.

The short argument is that BYD has relied heavily of government orders and government tax incentives to boost its growth to date. Some of those incentives have been taken away and BYD's guidance has been lowered twice by the company in the past year. Mr. Lin pointed out that the U.S. has similar tax incentives for its own manufacturers, such as the Tesla's $500 million loan from the Department of Energy.

BYD critics also point to the company's lack of profit as a major cause for concern. When I discussed this with Mr. Lin, he said it was not the right time to focus on profit. BYD had aimed to get its product out in the market and demonstrate its durability. There have been a number of deals which the company has struck with local Chinese governments for taxis, buses, and police cars. These weren't aimed to be huge money-makers, he said, but to show future consumers how well the car performs from heavy users.
2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BYD $18.68 0.24%
GM $30.59 -2.10%
MMI $23.94 -2.00%
LAS $0.15 -16.67%
TM $100.62 -0.82%


Chart of I:DJI
DOW 17,651.26 -99.65 -0.56%
S&P 500 2,051.12 -12.25 -0.59%
NASDAQ 4,725.6390 -37.5850 -0.79%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs