China’s BYD Eyes SoCal for Its U.S. Electric Car Ambitions

As far as China’s BYD Co. is concerned, Los Angeles has at least five markings of a prime launchpad for electric vehicles: high population density, air pollution problems, a large car market, affluent consumers, and a yen for new technologies. That’s why the battery giant and automaker has named the L.A. area as the region “at the top of the list” of potential lead markets for its electric vehicle and inaugural U.S. offering, the five-seat e6 scheduled to launch next year.

L.A. also presents a top candidate for the U.S. headquarters of BYD, according to a new Wall Street Journal interview with BYD’s Henry Li, senior director of the company’s auto business outside of China. Megabillionaire Warren Buffet’s Berkshire Hathaway investment firm owns a 10 percent stake in BYD.

Narrowing down the list of possible lead markets has been at least a 2-year process, according to Li, who told WSJ reporter Norihiko Shirouzu that it has shopped around local governments, comparing attitudes toward green cars and possible support for the nascent plug-in vehicle industry. California Gov. Arnold Schwarzenegger met with BYD President Wang Chuanfu in May, and Edmunds Auto Observer reported last fall that in addition to California, Michigan, Idaho and Portland, Ore., were also in the running for BYD’s North American beachhead.

Los Angeles already serves as the U.S. home base for a slew of Japanese automakers, including Honda, Toyota and Mistubishi, and as the LA Economic Development Agency put it in a report, “The auto industry in Los Angeles involves everything except assembling passenger cars.” Southern California now lays claim to the headquarters of plug-in car startups Fisker Automotive, Coda Automotive and Aptera, as well as AC Propulsion, which first developed the prototypical technology that evolved into the Tesla Roadster — but the region is striving for a starring role in the early days of the plug-in car market.

Tesla Motors, while based in Silicon Valley, will likely assemble its planned Model S in the Long Beach area, taking advantage of facilities once used for the region’s aerospace industry and competition between two local governments. (Downey and Long Beach, both hungry for the jobs and capital Tesla’s assembly plant could bring, are trying to lure the company with incentive packages.) And just last week, L.A. Mayor Antonio Villaraigosa unveiled a goal to install or upgrade 500 charging stations throughout the city — and provide $10 million in subsidies for 5,000 residential charge points — by next fall.

After Los Angeles, BYD plans to target customers in San Francisco, and potentially Boston, Chicago, New York and Seattle in later years. Li reiterated plans to potentially tap some celebrities as part of an effort to boost its brand among American consumers, but to focus its initial rollout primarily on public and utility fleets (a strategy shared by many EV makers, since fleets afford a relatively controlled environment with predictable routes and driving schedules as the kinks of real-world EV use get ironed out).

Winning BYD’s business could be a significant coup in the race to establish a hub in the nascent EV market. The company represents one of the highest-profile players in China’s fast-growing plug-in and hybrid vehicle industry, and could pave the way for other Chinese automakers to eventually put down stakes in the region.

According to a forecast from research and consulting firm Frost & Sullivan released earlier this year, the fact that legacy car companies in North America, Europe and Japan haven’t yet mastered the technology is a major factor in recent moves by the Chinese government and automakers such as Chery, Geely, SAIC, Changan and BYD to develop plug-in vehicles — the early stage of the market offers an opportunity for them to leapfrog established players. SoCal could be one of the regions to see ripple effects when they land.