BYD President Wang Chuanfu did not spend hundreds of thousands of dollars to have dinner with Buffett, but received an active investment of HKD 1.8 billion from Buffett. Wang Chuanfu stated that Buffett's China-U.S. Energy invested HKD 1.8 billion to invest 10%, which can enhance BYD's reputation in mainland China and internationally, help it expand its international business in the future, and plan to expand electric vehicles and products to the US market, accelerating the growth rate of its automotive business. BYD plans to sell electric vehicles in the United States in 2011, using new energy vehicles as a gateway to enter the North American and European markets. This is also one of the important reasons why Wang Chuanfu welcomes Buffett's investment.
200 million yuan integration of upstream industries
   Just a week after Buffett's HKD 1.8 billion investment, Shenzhen BYD Co., Ltd. announced the acquisition of a semiconductor manufacturing company, Ningbo Zhongwei, for nearly RMB 200 million. This marks the gradual opening of the industrialization of BYD electric vehicles.
   BYD's executive assistant Wang Jianjun told reporters that this move will integrate the upstream industry chain of electric vehicles and accelerate the commercialization of BYD's electric vehicles. Through this acquisition, BYD has acquired the research and production capabilities for electric vehicle drive motors.
   According to the data, Ningbo Zhongwei, which had to go bankrupt due to financial losses, was once the first semiconductor manufacturing enterprise in the southern area of Ningbo Free Trade Zone, with a registered capital of 100 million US dollars, positioned as a 6-inch chip manufacturing and service company, covering an area of 13 hectares. An industry insider who declined to be named pointed out that "the industrial real estate value of this acquisition is also significant.
   While integrating the R&D product chain, relevant news shows that BYD Group's newly built Shenzhen Pingshan Automotive R&D and production base has also been basically completed, mainly producing F6 and F0 models. BYD stated that it is expected that after the new base is put into operation, it will more effectively enhance the group's automotive research and development and production capabilities, benefiting the group from economies of scale and offsetting the cost pressure caused by the continuous rise in raw material prices, especially steel prices.
   According to insiders at BYD Auto, BYD will officially launch its new energy vehicle policy next year. Its confirmed new energy model is a dual-mode electric vehicle, and the F1e and F6e will be the first BYD models to be equipped with a dual-mode electric power system. These two models will be officially launched for sale in the second half of next year. BYD has stated that the prices of the BYD F1e and F6e models, which will be launched in the second half of next year, will be significantly higher than the corresponding gasoline versions.
Statistics from the first half of 2008 indicate that BYD Auto added 100 new sales outlets and began operations. At the beginning of this year, Xia Zhibing, the general manager of BYD Auto, announced that 200 new branches would be put into operation this year. The reporter learned that BYD's sales outlets are divided into two levels: A1 and A2. A1 website mainly sells two cars, F3 and F6, while A2 website sells F3R and the upcoming F1. The newly added branch is A2 network, which added 100 in the first half of the year and still plans to add 100 in the second half. There are currently 300 A1 websites nationwide. After the completion of the network construction this year, BYD will have 500 4S stores nationwide.
   In terms of production capacity construction, according to the plan, BYD's production capacity will reach 850000 vehicles by 2011. The detailed production capacity before 2011 is as follows: 200000 vehicles in 2008, 300000 vehicles in 2009, 520000 vehicles in 2010, and reached 850000 vehicles in 2011. Regarding this leapfrog development, Xia Zhibing still said, "In our opinion, this speed is not fast enough, at least not reaching a 100% growth rate
   While expanding into the domestic market, BYD's overseas expansion of electric vehicles has already begun. A few months ago, BYD officially signed a cooperation agreement with Israel's IDB Holding Group, and BYD will entrust IDB Group to exclusively represent the sales and services of electric vehicles in Israel. This marks that once Chinese electric vehicles are put into commercial use, they will immediately enter the Israeli market. BYD also emphasized that it hopes to further expand the market for electric vehicles in Europe through this action.
   The power station is the key
   While BYD is rapidly expanding its inventory, the scarcity of charging stations nationwide is also the first to consider the future of electric vehicles. BYD insiders say that the sales of dual-mode electric vehicles depend on the completeness of charging equipment construction in a region.
   Automotive expert Jia Xinguang stated that the new product requires extensive testing before it can be promoted nationwide. BYD dual-mode electric vehicles are currently mainly sold and used in Shenzhen for this purpose. Jia Xinguang further pointed out that the construction of the charging station is not up to the enterprise the final say, which involves many departments, interests and coordination time.
   It can be imagined that without the support of a large number of charging stations, the risks involved can be imagined before consumers purchase a large number of electric vehicle products. This also indicates that both the production and use of electric vehicles require significant investment.
   From the perspective of the industry chain, a very important aspect of the cooperation between Buffett and BYD is the establishment of charging stations. Wang Chuanfu said that one of the important reasons for choosing to cooperate with China US Energy for a long time is that the company has a strong energy network in the United States. Once BYD sells electric vehicles in the United States, it can fully leverage the power companies under Sino US Energy to build a large number of charging stations. With this capital injection, BYD can also free up its resources to collaborate with the government to further develop and construct domestic power station resources.
   BYD itself is also very eager to find a long-term strategic partner, especially in the United States. Commercialization of electric vehicles has always been our dream. In North America, relying on the reputation of Buffett and his company, coupled with the help of Sino US energy, BYD can realize this dream faster. "Wang Chuanfu pointed out that Sino US energy's extensive energy and power transmission networks in the United States can help BYD build electric vehicle charging station facilities in the future.
   And how will the industrial chain emerge after the charging station? Jia Xinguang believes that the space for further upward extension is likely to be in the field of power generation. If small and low-priced wind turbines and solar power generation equipment can be provided, it can enable households in remote areas, especially in western regions with abundant solar energy resources, to have electricity. In addition to meeting lighting, television, and food processing needs, it can also provide electricity for battery powered cars. And who will be responsible for exploring this broader market? Perhaps this is no longer something that Buffett and BYD can control during the capital stage.