Imagine if an American automaker like Chrysler announced that in two years time, it would cease building any car powered solely by gas engines. That would be quite the shocker, wouldn’t it? Well a new report suggests that Chinese automaker BYD, which is mostly owned by U.S. investor Warren Buffett, could produce only electric and hybrid vehicles within two years.
The move comes as BYD stock sank about 75% in the past year, as sales of green cars have not panned out as hoped. BYD sold just 458,000 vehicles in 2012, despite having an annual production capacity of 700,000 units a year. BYD’s first all-electric car, the F3DM, sold less than 2,300 units through the end of 2012.
BYD is one of the larger Chinese automakers, but it is not even on the same playing field as say, GM or Ford. Still, going all-green is a big risk, especially as Chinese consumers have been wary of buying hybrid or pure-electric vehicles despite generous government subsidies. BYD has managed to sell a fair amount of hybrids and EVs to local governments, but not nearly enough to keep the company viable.
But with their stock plummeting in value, BYD executives need to make a drastic about-face to save the company. Could the all-green lineup save BYD, or ultimately doom it?