Sunday, January 11, 2009

Apparently This Cat Catches Mice

In Friday's post I wrote
"Will we also see local governments willing to go to the mat for private firms? I think we will."
I wrote that, not knowing that today I would read this article in Nanfang Daily (dated 15 Dec 2008). Though it was published last month, I think it illustrates very well how important the auto industry is to China's government -- not just SOEs, but private firms as well.

BYD (比亚迪), a company about which I will certainly be writing more in the future, announced last month the introduction of their "dual mode" F3DM. "Dual mode" means that this sedan operates as both a plug-in electric car (like GM's old EV1, but with a longer range and better batteries) and as a hybrid (like Toyota's Prius). This is the first production plug-in hybrid in the world. Toyota, GM and others are working on plug-ins, but theirs will still not come to market until 2010 at the earliest.

I won't go too deeply in to why BYD was able to pull this off except to note that, before BYD was a car company, it was a battery company. Founded by an engineer in 1995, they made batteries for cellphones and laptops. Then in 2003 they bought a Xi'an-based state-owned car company and incorporated their two technologies.

With that bit of history out of the way, the article I am referencing here says that BYD, a privately-owned, Hong Kong-traded (HK1211) company has recently benefited richly from state support.

  • The City of Shenzhen (where BYD is HQ'd) and China Construction Bank signed an agreement to buy an unspecified number of F3DM cars from BYD.
  • The State Development Bank of China signed an agreement for development financial cooperation (sorry, it doesn't translate well: 开发性金融合作协议). From what I can tell, this is a long term loan for development purposes.
  • As if that weren't enough, Guangdong Province, home to the City of Shenzhen released a document in which they single out "Shenzhen BYD's electric car project" for state support. ("加快推动深圳比亚迪电动汽车等项目建设".)

"Will we also see local governments willing to go to the mat for private firms?"

We already have.



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Update: John Garnaut of the Sydney Morning Herald brought to my attention this article from the New York Times that highlights a lot of the cool electric/hybrid technology to be unveiled at this month's Detroit Auto Show.