Warren Buffet invests in Chinese battery & electric car maker

September 30 2008 / by Garry Golden
Category: Environment   Year: General   Rating: 4

Add Warren Buffet’s latest investment to the list of major news indicators that fuel forecasts saying that the dominant days of the combustion engine are coming to an end. (Read GM to Combustion Engine-R.I.P.)

Through his Berkshire controlled MidAmerican Energy, The Oracle of Omaha has invested $230 million for a 10% stake in China’s car and battery maker BYD. BYD could soon become a global leader in electric propulsion auto systems and a mainstream vehicle brand.

Following the growth in electric propulsion systems
While there are reports that BYD plans to ‘roll out fully electric cars before the end of next year’ and sell within the US, BYD does not have to displace GM or Toyota to return on Buffet’s investment.

Think of Shenzhen-based BYD as an advanced electric propulsion and electron storage device maker for Li-ion, Nickel batteries, capacitors and fuel cells. Rather than fight for market share against Toyota and GM in vehicle sales, BYD’s growth could be as an energy systems manufacturer.

Why MidAmerican might love BYD’s batteries more than its cars
Buffet’s other (or main) intention could be to expand the role of the electrical grid in fueling automobiles. He might also see promise in BYD’s battery systems for utility scale storage to improve the electrical grid.

Electric cars are coming in 2010-12 but we need to innovate energy storage solutions.

Recharging electric vehicles is not as simple as ‘plugging in at night.’ Our aging electrical grid and home wall sockets are not a suitable foundation for mainstream growth in battery vehicles- and automakers understand this.

Watch in the weeks and months ahead as electrical grid startups and electron storage companies like Shai Agassi’s Better Place gain more media attention and venture backing.

But what other innovative business models might emerge around electron-based transportation fleets? How about ‘swapping’ boxes?

Business models to watch
Batteries are clearly positioning themselves to launch the electric age of vehicles. Only time will tell how long they will remain the sole device for delivering electrons as capacitors and hydrogen fuel cells evolve.

The most innovative part of this transition from liquid fueled combustion engines to electric powered motors, is not likely to be the storage device, but the business models of refueling.

Swapping out Solid Boxes of electrons
While Shai Agassi’s Better Place business plan features a network of electric charge stations, the most ingenious method of reaching customers is probably the ‘battery swap’ station.

This might be the disruptive energy system we’ve been waiting for. Rather than plug in or fuel up using a hose, might we simply pull into a station and swap out boxes of energy?

Batteries make sense, but looking forward solid state hydrogen could emerge as a game-changing form of electron storage.

We’ll look at the enablers of energy storage systems on another day!

For now, we revel in Warren Buffet’s shake up in the auto and utilities industry, and for the investor attention towards energy storage!

And also the potential that China’s saving eco-grace might be helping us move beyond the combustion engine!

Comment Thread (3 Responses)

  1. So that’s where the smart money is headed…

    Posted by: Alvis Brigis   October 01, 2008
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  2. It’s about time. Too bad I don’t have money to buy a stake in them as well.

    Posted by: Procreator   October 01, 2008
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  3. Interesting. It’s about cheap battery storage at scale that would address one of the biggest drawbacks to wind and solar energy and making electricity when the wind is blowing or the sun is shining. Cars will be as interesting and economical as (qmi bed rail cap).

    Posted by: petty   June 04, 2009
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