China’s Rapid Progress on Electrifying Transportation
Posted June 28, 2010 at 5:23 am 
Filed in: Last Thursday, senior members of the Electrification Coalition policy team visited BYD in Shenzhen, China. BYD is, perhaps, the most ambitious of the Chinese electric car manufacturers, and gained widespread attention as Warren Buffet’s first investment in China.
One cannot help but be impressed by BYD. It is a fifteen year old company that now produces a full line of automobiles for sale in China. Its most popular model sells about 500,000 vehicles per year. Unlike most leading automakers, BYD is vertically integrated – it makes every part in the car except for tires and window glass. It also has expanded into a wide range of other energy related technologies, including batteries and solar cells, and other electronic goods, including cell phones and laptop computers. The company has factories around China and employs over 200,000 people.
Perhaps what is most interesting about the company is its sense of optimism and limitless possibilities. At a time when we at home seem to be somewhat uneasy about our economic future, BYD exudes an optimism that I have not felt at home in a while.
While at BYD, we had an opportunity to look at an example of its hybrid electric energy.
In the vehicle showroom, we saw a cutaway version of a plug-in hybrid electric vehicle in which on could clearly see where each of the component in the vehicle are located.
We then saw a fast charge station in which two vehicles were being charged.
Although we were not permitted to take pictures of it, we also toured an energy storage facility in which a bank of batteries store up to 1 MWH of energy generated from renewable sources that can be used during periods of peak demand. This facility is providing BYD with important information about the ability of batteries to serve in this role which is important both for promoting renewable energy and for understanding the opportunities for the use of used vehicle batteries.
While the experience presented by BYD was a wonderful vision of the future, it remains to be seen as to how well this vision will be translated into reality. Relative to the U.S., European and Japanese auto industries, the Chinese auto industry really is in its formative stages. The vehicles that we saw were beautiful from a distance and even close up. It seems apparent that their fit and finish is not yet commensurate with standards we are accustomed to at home, and it seems likely that vehicle performance will need to be fine tuned in order to meet American expectations. Yet, this was also true when Japanese vehicles first, and Korean vehicles later, came to the United States. Early versions were perhaps a little bit rough, but over time the vehicles improved and ultimately came to be some of the best made vehicles in the market.
The Chinese have clearly undertaken a serious effort towards EVs, driven by their concerns about energy security, climate change, local air pollution and the need to develop their automotive industry. While their initial efforts are not likely to be significant direct competition for the American automakers, over time they will. It is important that we enact policies to promote the GEV industry in the United States, so that can maintain our leadership in technology and vehicle production that is necessary to enhance energy security, and maintain the viability of the U.S. auto industry as we enter the transition to grid-enabled vehicles.
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