BYD unveils new energy strategy

Legendary investor Buffett came to BYD for the first time in the end of September, 2010. He spent most of his time in this journey on visiting in BYD's production bases and presenting the new car releasing conference. The new energy strategy is a sharp weapon of BYD in its development, and also what Buffett has settled on for investing.

"According to our planning, BYD has developed into two businesses of cell phone parts and automobile manufacture with each scale reaching hundred billion yuan from a pure battery business of only ten billion yuan by taking material science as its development core. In the future, it will enter into a much broader field of new energy industry." said Wang Jianjun, Deputy General Manager of BYD Automotive Sales Co., Ltd.

It can be seen from various expressions that the common idea that BYD is only an electric vehicle manufacturer is inexact.  The new energy-related business and strategy aimed by BYD are much more than the electric vehicle. The electric vehicle is just a kickoff in the planning of BYD.

"Electric vehicle business is a sector which starts earlier but needs to be further improved. There is always a common understanding in this industry that the high cost is a big balk against the large-scale commercialization of electric vehicles.

And only the large-scale production can in turn lower the cost of electric vehicle dramatically." Wan Jianjun said, "While investing on R&D continuously, BYD is implementing a vertical integrating strategy in the layout of the industry, so as to seize the preemptive opportunity as soon as possible. For example, BYD has begun to capture the market high grounds in the projects of city taxi, electric bus by right of its well operated e6 taxi and recently launched K9 electric bus."

In fact, electric vehicle is just one of the three big green dreams and the others are grid energy storage station and solar power station. "The grid energy storage station and solar power station can lead us go further on the broad road of new energy; however, this will depend on, to a large extent, the realization of our electric vehicle dream. The realization of the huge sales of BYD's electric vehicles will lay a solid foundation for BYD's further development in iron battery, solar battery and even solar grid storage." Wang Jianjun believed.

As global energy sources are in short supply day by day, the development of new energy economy is becoming an inevitable trend. Beside continuous development of new green energies, how to efficiently utilize traditional electric power is also becoming a hot issue, which has been attached more importance to and studied by people. That is, only doing well at both the development of new energy and the storage of exist energy can the green dream be realized. The aim of BYD to take the electric vehicle, grid energy storage station and solar power station as the breach of developing new energy is to take the first-mover advantage of R&D in new energy market.

Traditional electric power is the main energy utilizing form used by human being today. Nowadays, the global power demand is increasing year by year, and the gap between the peak and valley of the electricity load is growing continuously. In order to average the load and improve the use efficiency of power generation facilities of nuclear, wind and other resources, the demand for grid energy storage stations with the function of peak-load regulation will increase gradually.

The continuous growth of demand for energy sources and electric power will undoubtedly drive the energy storage market to develop quickly, plus the increasing attention paid by various countries in the world to emerging energy industry,

BYD's grid energy storage station will see an excellent prospect for application and development." Wang Jianjun said, "While integrating its advantages in electric vehicle R&D and in market share, BYD will not stop its actions before the sales of electric vehicle rise up. All efforts regarding solar power station and grid energy storage station, whichever in technology R&D or the layout of market, will be kicked out as soon as possible."

It is understood that in the first half of this year, BYD's two 100kw grid energy storage stations have been put into demonstrational use in Beijing and Shanghai respectively; an agreement of the cooperative project on wind and photovoltaic power storage and transmission with CEPRI has been signed and batteries and related equipments have begun to be delivered; on September 14, BYD successfully entered into a cooperation plan with US Los Angeles Department of Water and Power regarding the project of renewable energy storage grid; on September 27, BYD officially signed a framework agreement of grid energy storage station cooperation with China Southern Grid.

The project aims to fully hold the integrated application technologies for the large-capacity electrochemical energy storage system and exploring the high efficient operation and management mode of energy storage system, in order to make a technical preparation for the large-scale application of battery energy storage technology, supporting the mass access of renewable energies like wind power and photovoltaic power to the grid , and supporting the "low carbon" society ; On September 30, BYD signed an agreement with Hunan Grid to build a 10mw grid energy storage station in Changsha.

In the area of solar power station, BYD applied its specialized vertical integrating method into the extraction of polysilicon, greatly reducing the cost of solar power. Although this technology is still in the pilot stage, it has made BYD take certain advantages in the industry. In 2009, BYD start the construction of the first stage of solar battery project in Shangluo, Shaanxi Province and the capacity of it is 100mw. In the first half of 2010, the first stage of the Shangluo solar base was built up basically and realized sales of 200 million yuan.