18 Nov BYD announces Partnership with Toyota for All-Electric Battery Cars
BYD Company Ltd (OTCPINK: BYDDF), a leading Electric Vehicles Manufacturer, announced a partnership with Toyota Motor Corporation (NYSE: TM), for creating a Joint venture that will focus on research and development in the field of battery electric vehicles (BEVs). The Company will be established in China in 2020 and will have equal investment from both the Companies. The new company will design and develop BEVs (including platforms) and related parts.
BYD is an industry leader in battery-electric automobiles, buses, medium- and heavy-duty trucks and forklifts, taxi fleet vehicle ; the SkyRail monorail system; solar power generation and energy storage systems; and consumer electronics.
BYD Company Ltd (OTCPINK: BYDDF)
Market Cap: $15.69B; Current Share Price: 4.86 USD
Data by YCharts
Lian Yu-bo, BYD’s Senior Vice President, commented,
“We aim to combine BYD’s strengths in development and competitiveness in the battery electric vehicle market with Toyota’s quality and safety technology to provide the best BEV products for the market demand and consumer affection as early as we can.”
Toyota’s launched the world’s first mass-produced hybrid electric car (HEC) Prius in 1997, and has till date sold more than 14 million electrified vehicles worldwide. It has vast knowledge and expertise in the area of development, production and sale of HEV’s and their related components. The Company has invested heavily in the Chinese auto market with collaboration between Toyota Motor Engineering & Manufacturing (China) Co., Ltd. (TMEC) and the R&D centers established at Chinese joint-venture companies with China FAW Group Corporation (FAW) and Guangzhou Automobile Group Co., Ltd. (GAC) as per a Company statement.
Shigeki Terashi, Toyota’s Executive Vice President, stated,
“With the same goal to further promote the widespread use of electrified vehicles, we appreciate that BYD and Toyota can become ‘teammates’, able to put aside our rivalry and collaborate. We hope to further advance and expand both BYD and Toyota from the efforts of the new company with BYD.”
The Company is on a roll with the Los Angeles Department of Transportation placing an order for 130 battery-electric K7M buses. This order is the single largest order ever received for battery-electric buses to date in the United States. The project is part of the city of Los Angeles “Green New Deal”, which aims to convert the entire LADOT fleet to zero-emission buses by 2030.
BYD North America President Stella Li, commented
“We applauded LADOT for its bold leadership, ambition, and desire to improve the air quality for the City of Los Angeles. BYD buses will be an important component of the city’s efforts to meet its sustainability goals. We are proud to partner with an agency that shares our green dream.”
The International Energy Agency predicts that the Electronic Vehicles which stand at 3 million today will grow to 125 million by 2030. The Global Electric Vehicle market is all set to compete with the internal combustion engine (ICE) vehicles in the next five year, accounting for one out of every five cars sold by 2030, according to Seth Goldstein, an analyst and chair of Morningstar’s electric vehicle committee. The growth of this industry is a result of the initiatives by governments around the world, in the form of tax rebates, grants, and subsidies for adoption of renewable and more environment friendly options for transportation. Unlike conventional vehicle which can only replenish their fuel at specific public locations, Electric vehicles can be charged at home or commercial charging stations.
However, the limitation of sufficient charging capacity to cover long distances discourages the use of these vehicles. There is an increased focus on research and development activities, especially in the passenger car sector, to improve infrastructure and supply equipment and establish EV chargers at easily accessible public places, to allow long distance travel as well. Range anxiety which acts as the biggest impediment for the market at present, will soon be a thing of the past, with Companies racing to develop connectivity modules.
The demand for electric vehicles will also bolster the demand for ancillary industries such as engine components, electronics for propulsion systems, battery optimization and torque transfer devices. In fact the demand for lithium, which is a crucial component of energy storage in transportation batteries, is likely to quadruple over the next decade according to Seth Goldstein.
A report by McKinsey estimates that by 2025, there will be more than 350 EV models introduced into the market, with ranges of 200 miles. However a lack of charging infrastructure could hamper the growth in the market. The report also highlights the fact that besides price and driving range, lack of access to charging stations is the third most serious barrier to EV. However there have been a gradual decline in prices and improvement in driving range and companies are making a concerted effort to provide the requisite charging infrastructure. Furthermore the total energy demand for electric vehicles in China, United States and European Union alone will reach 280 billion kilowatt-hours by 2030.
There has been an increasing interest in EV’s owing to environmental concerns, which has prompted leading automobile makers such as BMW, Daimler, Ford, and Volkswagen to announce an investment plan for deployment of 400 charging sites across Europe, in addition to investing approximately $90 billion in electric vehicles, according to a report by Reuters.
Volkswagen is planning to produce 1 million electric vehicles by 2025, with over 70 new all electric models, and invest nearly $50 billion in electrification through 2023. Not to be left behind Companies such as Ford have committed to investing $11 billion by 2023, while General Motors plans to roll out 20 fully electric models by 2023, a testimony to the potential of this market.
Byd is a pioneer in the electric vehicles market, and is the first Company to produce the plug-in hybrid electrified vehicles (PHEVs) on a mass scale. The Company’s mission is to create a complete, clean-energy ecosystem with minimal reliance on petroleum. Byd is a world leader in numerous sectors such as battery-electric automobiles, buses, medium- and heavy-duty trucks and forklifts, taxi fleet vehicle ; the SkyRail monorail system; solar power generation and energy storage systems; and consumer electronics.
The Company claims to be the world’s largest electric vehicle manufacturer for three consequent years in consumer as well as industrial electric vehicles. It sold over 113,000 plug-in electric vehicles worldwide in 2018 and has more than 40,000 electric buses in operation around the world. The Company is also one of the largest rechargeable battery manufacturers in the world, and uses non-toxic Iron-Phosphate battery chemistry, to cater to numerous markets such as mobile phones, laptops, large-scale, grid-connected energy storage systems.
Warren Buffet’s Berkshire Hathway is the largest single shareholder and holds an 8 percent stake in the Company. The Company has recently signed an agreement with Japan’s Toyota Motor Corporation to set up a joint company for research and development in the field of battery electric vehicles (BEVs). The new Company will be established in China in 2020 and will be created by an equal investment by both the Companies.
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