Buffett-Backed BYD Hailed in California as Toyota Exits to Texas

Apr 28, 2014 8:00 pm ET

April 29 (Bloomberg) -- BYD Co., the Chinese automaker partly owned by Warren Buffett’s Berkshire Hathaway Inc., rolled out the first two electric buses from its California factory as it pushes into the U.S. and Canadian markets.

The 40-foot battery-powered vehicles were to be delivered to the Antelope Valley Transit Authority in northern Los Angles County, where BYD has its U.S. headquarters in the city of Lancaster.

“BYD is the harbinger of things to come,” said California Governor Jerry Brown, who led a trade mission to China in April last year and toured the BYD factory yesterday. “This is the great dream.”

Brown’s visit came on the day that Japan’s Toyota Motor Corp. said it will move about 2,000 people from its U.S. sales base in Torrance, California, to a new North American headquarters to suburban Dallas. Brown, a 76-year-old Democrat, is seeking re-election against Republicans who have said California’s high taxes and strict regulations push businesses out of the state.

Brown didn’t mention Toyota in his remarks at BYD and took no questions from reporters.

The move is a win for Texas Governor Rick Perry’s campaign to lure California companies and a blow to the Golden State, the biggest U.S. auto market and proponent of the strictest clean- air rules.

BYD Motors, which now employs 60 people at its plant, expects its payroll to reach 100 by the end of this year and grow to 200 in 2015, Chief Executive Officer Stella Li said.

Orders, Evaluations

The Lancaster factory has orders from Stanford University in Palo Alto, California, and the Los Angeles County Metropolitan Transportation Authority, said Michael Austin, vice president of BYD’s U.S. unit. Its buses are being evaluated by Ottawa, Montreal, New York and the Los Angeles Transportation Department he said.

The Shenzhen, China-based automaker is the world’s largest producer of electric buses, having manufactured more than 1,300 such vehicles, according to an e-mailed statement.

BYD plans to make 200 buses annually by the end of 2015, Austin said earlier this month in an interview at the Beijing motor show.

Auto Plans

Besides buses, BYD plans to introduce about four passenger- car models for its U.S. debut at the end of 2015, Li said in an interview in January. Though BYD wasn’t ready when it earlier sought to enter the U.S. car market in 2010, the company is more prepared this time, she said.

BYD has revived plans to sell new stock equivalent to as much as 20 percent of its Hong Kong-traded shares, people familiar with the matter said last month. The company submitted an application with the China Securities Regulatory Commission, the people said, asking not to be identified because the proposal hasn’t been made public.

The funds would give the company room to step up investments and bolster production of electric cars and buses. Selling shares would also help alleviate the strain on a balance sheet that’s seen net debt surge last year to a record.

--With assistance from Alexandra Ho in Shanghai.