We had better get our act together in the automobile business, because an onslaught of new foreign competition is heading our way. If the near future ...
We had better get our act together in the automobile business,
because an onslaught of new foreign competition is heading our way. If the near future is going to be hybrid cars, the domestic automakers had better get things up and running quickly and with more variety -- China is coming quickly.
In an Associated Press report, Elaine Kurtenbach notes that privately owned BYD Company Limited has just launched China's first electric hybrid vehicle for the retail market. This vehicle, branded the "F3DM," which was just introduced in southern China's Shenzhen city, can drive up to 60 miles entirely on its electric engine. A gasoline engine can be engaged to recharge the vehicle's battery, or you can plug it into a regular electrical socket at home or at your local dealership.
This vehicle is expected to sell for about 149,800 yuan, or approximately $22,000 in U.S. dollars. A version of this vehicle will come stateside as soon as the company alters its design to meet our safety standards.
This car company was founded in 1995 with 20 employees. Originally a battery manufacturer, BYD now has over 130,000 employees and it wants to be the world's largest supplier of electric cars by 2025. Warren Buffett's Berkshire Hathaway just agreed to invest in BYD, purchasing a 10% interest worth two hundred and thirty million dollars.
We've got the "Chevy Volt" coming in 2010 and Chrysler is actually working hard at developing hybrid electric systems to put into a number of its vehicles, including the "Jeep." Ford seems to be a bit behind in electric vehicle development, saying it's about five years away from any major production.
We've got to get these vehicles in the marketplace and rolling as soon as possible. The problem we have is that Chinese companies have significant expertise in battery technology development, and that country also boasts a very low cost structure, which is going to make competing a real challenge.
Say BYD addresses U.S. safety standards for its F3DM. Say they get approval to export this vehicle to the U.S. market and it brings the cost of the vehicle up to $25,000. The Volt is expected to hit the marketplace with a price tag of around $40,000. This is the makings of a real problem.
So, I think we've got to get the Detroit bailout package settled and get some serious incentives to get more electric hybrid vehicles into production. Like in most industries now, the big red dragon is just around the corner, waiting to breathe down our necks.
Profit Confidential
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