China's $2.00 Lithium Linchpin
BYD Company Limited: (HK: 1211) (Pink Sheets: BYDDF)
BYD owns bragging rights as the world's leading rechargeable battery producer.
But that is far from the whole story...
Based in Shenzhen Guangdong Province, China, the company has nine sites across China where it produces everything from auto parts to cell phone products and chargers.
While BYD has worked with major mobile phone producers like Motorola, Nokia, and Samsung, the company's main focus is on making the next generation of cars to feed the exploding market for personal vehicles in the East.
Building the company around expertise in lithium, BYD has rounded up some of the best engineers in China — and has given them the responsibility of figuring out how this corporation will provide personal vehicles to a starving market of over 1 billion Chinese citizens.
In fact, BYD is rare in the fact that it makes almost every component of its vehicles in-house. This means no more issues with contractors and much higher margins. From start to finish, BYD oversees the manufacture, assembly, and sales of its products.
While BYD has only been making cars for a few years, it has already mass-produced the world's first plug-in hybrid electric vehicle (PHEV).
As all of the world's automakers have been racing to make PHEVs sensible, an up-and-comer is already pumping them out as if it were easy.
And considering the fact that China is the number one vehicle market in the world, the chance to get in early on what could easily become the largest car producer in the world is proving to be too attractive for even the most savvy of investors.
In fact, the world's most famous investor, "The Oracle" Warren Buffett, threw down $230 million for a 10% holding in BYD in 2008. And billionaires in Nebraska aren't the only ones interested in the idea of working with BYD...
In 2009, VW signed a memorandum of understanding with BYD to "work together in the area of electric mobility."
When a 70-plus-year-old mega-corporation signs on with a company that's only been on the scene for a fraction of that time, you should pay attention.
Another major attribute of BYD is the diversity in the vehicles it produces. While many automotive companies spawned in the beginning of the 21st century are still working to perfect and mass-produce one vehicle, BYD has no less than six already on the showroom floors.
From PHEV's (Plug-in Hybrid Electric Vehicles) to fully electric, BYD has a full line of vehicles that are not just ideas; they are already on the road...
BYD e6: Crossover vehicle (100% Electric)
BYD f3dm: Compact sedan (World's First PHEV)
BYD s6dm: SUV (PHEV)
BYD ebus: Electric Bus
Solar cells on roof
- Electric Range: 155 miles
BYD has its eye on China's growing middle class. With a disposable income, more Chinese have been looking to buy cheap yet efficient vehicles for personal transportation. Because of this, BYD hopes to become the world's largest producer and seller of automobiles, growing exponentially over the next few years.
The stock climbed as much as ~500% after Buffett invested. It dwarfed that gain following the recession and China's economic squeeze and could again once its cars go on sale worldwide — particularly in the "car cultures" of Western countries like the United States and Europe...
You can download the PDF version here: China's $2.00 Lithium Linchpin
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