How Investors May Profit From China’s Eco-Crises (Part 1 of 2) – BYD Co.’s Unique Car Battery Strategy
Submitted by EnergyTechStocks.com
Editor’s Note: In keeping with its policy to be solely a news source, this EnergyTechStocks.com series is intended to be for information purposes only.
Posted: March 20, 2008
When the world record holder in the marathon announced two weeks ago that he will not run this summer in the Olympic marathon in Beijing, it was only the latest (and most obvious) indication of the growing environmental emergency confronting China. Since then, researchers at the University of California, Berkeley, have reported that China’s carbon dioxide emissions are completely out of control. Also, the Washington Post has reported that even one of China’s new green industries, solar panel manufacturing, is dumping tons of toxic waste on the countryside.
Even if Beijing tries to censor journalists covering the Olympics, there will inevitably be plenty of stories read and seen in every corner of the world about China’s incredible environmental problems and how they threaten the rest of the planet. This should push Beijing to put real teeth into its so far half-hearted actions to combat its numerous environmental crises involving air, water and land.
How can investors take advantage of all this? EnergyTechStocks.com has come across a number of companies – on its own and via interviews with analysts – that would seem to be well positioned to benefit from the harsher global spotlight about to shine on China’s eco-emergency.
One company in particular stands out (at least to EnergyTechStocks.com). Hong Kong-based BYD Company Ltd., which trades on the Hong Kong exchange, is a car battery company with a difference. The world has many companies that are developing batteries for the coming era of electrified transportation. But unlike the rest, BYD isn’t waiting to see whether major auto manufacturers decide to incorporate their new batteries into plug-in electric cars and trucks. BYD plans to make and sell these vehicles itself.
After a limited rollout in China in 2008, BYD has plans to start selling in both Europe and the United States by 2010. “Electricity will replace gasoline,” BYD’s chairman told a Bloomberg reporter at the Detroit Auto Show in January. Another BYD executive chimed in, “BYD has strength in developing batteries. But it takes a lot more than batteries to sell cars.”
With gasoline prices rapidly rising throughout the world, the desirability of “filling up” on electricity costing the equivalent of only two to three gallons of gasoline keeps growing by the day. Sure, initially there may be quality concerns, especially in America, about Chinese-brand automobiles. But the advantage of being first to market with a vehicle that promises to eliminate sticker shock at the gas pump can’t be underestimated. Moreover, with U.S. Vice President Dick Cheney in the Middle East this week basically begging oil producers to raise their output, the national security advantage of driving a plug-in electric hybrid vehicle also come into focus – even if it’s made by a car company in China.
In the estimation of EnergyTechStocks.com, investors may soon be taking a closer look at BYD. Still, BYD isn’t the only potential beneficiary of China’s eco-crises, as will be discussed tomorrow in Part 2 of this series.
