Is there a Chinese car in your future? Yes, but it may take a while. But Bill Gates and Warren Buffett, in China to try to convince the country's many billionaires to be more philanthropic (as they are) wants to hasten the process.
They used the occasion of their China visit to visit BYD ("Build Your Dreams"), one of the largest Chinese automakers (and battery makers, too). Buffett just happens to have invested $230 million in BYD and owns nearly 10 percent of the place. His stake has dramatically increased in value, making $1 billion in paper profit, and he's been hinting he could increase his stake in the company.
BYD has built both hybrid and electric cars, and one of the latter, the E6, is supposedly headed for the U.S. market. But the pair took a ride in a BYD M6 van, and liked what they found. "It was fantastic. I am amazed at the quality of that vehicle," Gates said. Buffett added, "If I had a car like that in high school, I would have had a lot of dates!" He told an assembled group of car dealers, "BYD is the right choice for me, and I hope it'd be the same for you."
Down boys. BYD has some intriguing elements, including that E6, but it may not be quite ready for prime time in the west. Chinese cars, like Chinese goods in general, have suffered from quality problems, and with cars it's been safety performance that's been the big hangup. Here's a crash test of a Chinese car if you don't believe me. Its in French, but you don't need the provided subtitles to see what happens when that car hits a wall:
And BYD has its own challenges. Its sales in China fell 19 percent in the first eight months of 2010 compared to the same period last year. As a result, the Wall Street Journal reports, the company slashed sales targets for the year from 800,000 to 600,000. Some analysts wonder if BYD has spent too much time on electric car development and neglected its core gas cars. Here's some CNBC analysis:
BYD is in a unique position to market electric vehicles, because it's a big lithium-ion battery player. But I talked to one of the few westerners to drive the E6, battery consultant Menachem Anderman, and he told me it was interesting, but not built to western standards. Critics are also saying it won't meet range targets, getting 60 miles less on a charge than the company claimed when it debuted the car last year.
I do think Chinese cars will be sold in the American market. And I think BYD could be a big player --eventually. But I found it hard to believe when the company said it was going to have its electric vehicle on the U.S. market in 2010. Yes, this year. I think the E6 needs more development work, especially when it comes to safety and refinement. And it needs test drivers more experienced than Bill Gates and Warren Buffett.