Saturday, 27 Sep 2008
Warren Buffett Invests In Chinese Company Developing 'Green' Cars
Posted By: Alex Crippen
Topics:Automobile Industry Energy Alternative Energy Warren Buffett
Sectors:Automobiles and Parts
Companies:Constellation Energy Group Inc Berkshire Hathaway Inc.
A subsidiary of Warren Buffett's Berkshire Hathaway is making a $230 million investment in a Chinese battery company that's developing environmentally-friendly cars to be sold around the world.
In a news release, Berkshire's MidAmerican Energy Holdings says it has agreed to buy a 10 percent stake in BYD Company Limited, which trades on Hong Kong's stock exchange.
BYD chairman Wang Chuanfu is quoted in the release as saying, "We are extremely pleased and grateful that Berkshire Hathaway and MidAmerican will be our long-term investor and partner, as we bring our electric vehicles and other environmental protection measures to the global space."
As is the custom in this sort of announcement, Buffett returns the compliment. "We are thrilled to be partners with BYD and the people of China. Mr. Wang Chuanfu has an extraordinary managerial record, and we welcome the opportunity to work with him."
MidAmerican Chairman David Sokol calls BYD's technologies "an integral part of the future."
Reuters says BYD is working on electric-hybrid cars that it plans to sell in China starting later this year, and in Europe by 2010.
"BYD's electric cars are expected in Israel and Europe by 2010. The firm has said the cars could travel 300 km (190 miles) on a single charge. A full charge needs nine hours using its lithium-ion batteries, although they could be charged to 80 percent capacity in 15 minutes. ($1=7.773 Hong Kong Dollar) (Editing by Lincoln Feast)"
BYD's realtively low share price may have been part of Buffett's buying decision. Reuters says the company's shared closed at HK$8.40 on Friday, less than half of its October high of HK$20.45.
While this is a relatively small deal, it continues Berkshire's recent trend of putting money into technologies meant to reduce the world's reliance on oil as an energy-source. Late last week, MidAmerican picked up Constellation Energy
for the "bargain" price of $4.7 billion, after its stock had been beaten down. Constellation has several nuclear power plants in the U.S. and has plans for more.