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BYD Battery and Auto Manufacturer: A Shockingly Good Investment

Rex Roywriter

AutomobileMag.com has been keeping a close eye on the Chinese battery company and auto manufacturer, BYD. We reported on its presence at the 2009 Detroit Auto Show, and Don Sherman interviewed the company's chairman.

The company continues to advance. Proof is that Warren Buffett's 10-percent stake in BYD reportedly made Berkshire Hathaway Inc. some $1 billion in less than a year. Driving the rapid rise in BYD's value is the company's release of hybrid automobiles like the plug-in F3DM and F6DM hybrids, and the all-electric E6. As important, if not more critical than the company's automobiles are BYD's high-tech lithium iron phosphate batteries. These cells, also known as Fe or Ferrous, boast high reliability and durability with lower cost than batteries of similar power densities.

Batteries create voltage based on internal chemistry, and knowledge of BYD's particular iron mix has been around for years. Sometimes called the Super-Iron battery, the chemistry is related but not identical to other lithium cells. The benefits of the BYD Fe design is that the materials used in its cells cost less and are more readily recyclable than competitive batteries using materials such as cobalt.

Ferrous technology also allows for quick charging compared to many other battery chemistries. When hooked to with BYD's special charging unit, batteries can gain a 50-percent charge in only ten minutes, and a full charge in just one hour. Overnight charging to 100-percent capacity using 110-volts requires 7.5 hours. BYD also claimed that their Fe batteries are capable of 2000 charge cycles, enough for 7-10 years of normal driving.

BYD's recent partnership with Volkswagen (a letter of understanding signed this spring) and other potential hook-ups further demonstrate the commercial value of the company's energy storage technologies. BYD is China's largest producer of rechargeable batteries for portable electronics.

BYD Chief Executive Officer Wang Chuanfu has publicly stated his company's plan to more than double global sales this year with new models and additional export deals that will eventually include the United States. With all of this in mind, it shouldn't come as a surprise that Buffett bolstered his company's investment in BYD by acquiring an additional 225 million shares of the company.