BYD has finally dedicated its new U.S. headquarters building in Los Angeles.
Chinese battery car maker BYD is taking a giant step closer to finally launching itself into the U.S. market with today’s opening of its U.S. headquarters.
With the debut of the new Los Angeles facility, the company promised to create 150 jobs as it puts a small number of 40-passenger electric buses into operation as shuttles at the Hertz rental office at Los Angeles International Airport. But precisely when its e6 battery-electric SUV and other models will actually go on sale to the U.S. public remains anything but certain after a series of delays.
Short for Build Your Dreams, the Shenzhen-based maker has run into a number of problems that have seen its sales, earnings – and stock price – plunge over the last year.
“L.A. and Shenzhen are definitely the innovation centers for each of our nations,” proclaimed Wang Chuan-fu, BYD’s founder and chairman, during a dedication ceremony that drew an assortment of dignitaries and investors – including Charlie Munger, vice chairman of Berkshire Hathaway.
The investment arm for Warren Buffett, it currently holds a 9.9% stake in BYD worth $232 million after the two-thirds plunge the Chinese company’s stock has taken over the past year.
China's BYD wants to begin selling the e6 battery car in the U.S. in the coming months.
Once among the high-fliers in the Asian nation’s booming economy, BYD saw sales fall sharply short of its ambitious 800,000-unit target last year, actual volume reaching only 519,800. This year, the decline has worsened, sales dipping to just 232,400 for the first half of 2011, another 19.6% decline, and seem unlikely to meet the 550,000 target for the full year, according to analysts.
Meanwhile, first-half profits plunged 89%, to $43.1 million. That’s a key reason BYD’s recent initial public offering fell well short of expectations. It had hoped to raise $338 million but ultimately pulled in just $219 million. Short of cash, the maker has laid off scores of workers, transferring others from corporate jobs to its showrooms.
BYD started out as a battery maker – and is today one of the world’s largest suppliers to lithium-ion technology to the computer and cellphone industry – but Wang hoped to gain traction in the emerging electric vehicle market. China, in particular, has been promoting the technology as a way to solve its endemic pollution problems and reduce its dependence on costly imported oil.
BYD was, in fact, the first major maker to bring a plug-in to market, nearly two years ago. But the vehicle quickly experienced technical troubles and the subsequent recall seemed to trigger the cascade of problems it has since faced. Demand for its electric vehicles have so far lagged expectations and now make up a small fraction of its total sales.
But that could change. It recently revealed an updated version of its electric SUV, dubbed the e6B, which will now be sold to the general Chinese public as well as to government and corporate fleets. The vehicle reportedly has a range in excess of 150 miles per charge and a top speed of over 100 mph.
BYD officials have promised to launch sales in the U.S. for several years but are no longer putting a hard deadline on that move. Nonetheless, the opening of the L.A. corporate office is a signal that it is intent on making the jump across the Atlantic, according to company sources.
The new headquarters is a refurbished, 30,000 square-foot building along the downtown Figueroa Corridor that the company has agreed to lease for 10-years – with financial assistance in the form of city tax breaks and $2 million in federal funds used for the building rehabilitation. The opening comes nearly a year after originally scheduled.
The facility will serve as a showroom of sorts – for potential dealers interested in checking out the company and its products but not for the general public.
Officials hope to have the first dealers open by year end, both operating in Southern California. They’ll retail both the e6 and BYD F3DM plug-in hybrid. That is, of course, if there aren’t further setbacks. In the meantime, those curious about the maker’s technology will have to rent a car from Hertz which quietly began operating the first BYD shuttle bus at LAX last month.