BYD — it stands for "Build Your Dreams" — built a future in Downtown L.A., home to its North American HQ. Unfortunately, it's enduring something of a nightmare with its business at home in China, even with billionaire Warren Buffett invested.
BYD is a Chinese company that has one big thing going for it: It counts Warren Buffett as an investor. But beyond that, the carmaker/batterymaker/solar manufacturer has been enduring a rough ride. It's seen a massive decline in earnings this year, while Buffett has seen his 10 percent stake, purchased in 2008, fall to substantially less than its 2010 peak value of $1.2 billion. BYD (it stands for "Build Your Dreams") executives have been heading for the exits.
There are some complex, interpersonal, inside-Berkshire Hathaway questions about how Buffett and his longtime partner, Charles Munger, came to be involved with BYD. But there's no question about how Los Angeles came to be home to BYD's North American headquarters, opened Downtown about a year ago, in a corridor that's jammed with auto dealerships.
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Tesla's recently revealed Model X crossover electric vehicle. The company has just announced a new sale of shares to raise money — and avoid payment problems with a Department of Energy loan.
Tesla Motors, the startup electric carmaker whose CEO, Elon Musk, also runs private space-exploration firm SpaceX, is having another one of its periodic financial near-heart attacks. The latest news is that the company, which staged a $226-million IPO in 2010, wants to sell additional stock. A second offering of 6.9 million shares would bring in close to $150 million. [UPDATE: As a commenter notes, the offering was rather less than 40 million shares. Don't know where I got that... Also, this is Tesla's second secondary offering. So really, it's the third offering, including the IPO.]
Why? Yet another cash crunch for the company, which was pretty close to checking out in 2008, before Musk managed to find additional funding and do a deal with Daimler. The critical issue this time around involves the Department of Energy and it controversial loan program for greentech companies. Who can forget Solyndra? But electric cars are also a substantial part of the program, with both Tesla and Fisker Automotive — the two biggest names in alt.transportation — winning loans.
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Update: I spent a some time talking about the show with Larry Mantle on Airtalk this morning, with Eddie Alterman of Car and Driver and Ed Hellwig of Edmunds Inside Line. Check it out.
I'll be roaming the floor of the Los Angeles Auto Show for the next two days, checking out new cars, green cars, concept cars, and the business of cars in Southern California. I'll also be tweeting, so if you want to follow me, check out my Twitter feeds, below.
Look for photos, insights, and even some video. The LA Auto Show is the first big car show for the global industry, kicking off a season that runs for months and travels around the world.
The industry has taken its share of lumps over the past few years. The financial crisis nearly killed both Chrysler and General Motors — and seriously threatned Ford — but the Big Three are back, racking up profits quarter after quarter.
BYD — it stands for "Build Your Dreams" — is building a future in Downtown LA, new home to its North American HQ. Unfortunately, it's enduring something of a nightmare with its business at home in China, even with billionaire Warren Buffett invested.
In business, timing is everything. So what to make of a dignitary heavy ribbon cutting this morning at the new North American headquarters of Chinese carmaker BYD ("Build Your Dreams"), at a time when the company is facing business challenges at home — and challenges to deliver on ecomomic promises in LA?
BYD America opened today about a year behind schedule with fewer workers than first targeted. The company, partly owned by Warren Buffett's Berkshire Hathaway Inc., has delayed plans to sell electric cars to retail buyers, citing limited availability of public chargers. Instead, it's focusing on solar panels, batteries, LED lighting and rechargeable buses.
Initial goals for the Shenzhen, China-based company's California arrival haven't been met either in BYD jobs or indirect business created. The delays reflect a combination of construction obstacles and an electric-car market that hasn't developed as rapidly as first expected.
In April 2010 when the deal was announced, BYD said it would open the office by the end of 2010, and have 150 employees by the end of this year. It now has 20 employees in Los Angeles, with plans to reach 30 by year-end and 100 by the end of 2012, according to Micheal Austin, the company's U.S. vice president.
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WILMINGTON, DE - OCTOBER 27: U.S. Vice President Joe Biden speaks at the former GM Boxwood Plant on October 27, 2009 in Wilmington, Delaware. Fisker Automotive announced that the company is buying the plant to produce affordable plug-in hybrid automobiles. (Photo by Jeff Fusco/Getty Images) *** Local Caption *** Joe Biden
The Department of Energy's $535 loan gurantee to bankrupt solar startup Solyndra has become the Obama Administration's first quasi-scandal, with critics insisting that the government shouldn't be funding risky green-energy companies and supporters (myself included) arguing that the government is the only investor that can handle the risk. But now the bickering has spread beyond solar to the go-go world of electric vehicles — just as "Revenge of the Electric Car," the sequel to "Who Killed the Electric Car," is hitting theaters.
ABCNews and the Center for Public Integrity have teamed up to investigate DOE loans guarantees, focusing on two marquee EV companies, Tesla Motors and Fisker Automotive, which together have received about a billion in government-backed financing. The takeaway isn't pretty: