After a few months of silence from BYD (HKEx: 1211), the electric vehicle aspirant backed by US billionaire Warren Buffett has announced a new pilot program to test out its electric buses in the German city of Frankfurt. (company announcement) While any new orders for its electric vehicles outside China are certainly good news for BYD, a closer look at this latest deal is hardly anything to get excited about. The pilot program in Germany, already known for its willingness to try just about anything with the word “green” in it, involves a total of three electric buses and two charging stations, which no doubt BYD is supplying free of charge or at very very very reduced costs. The buses won’t even be riding around Frankfurt on regular routes, but will be mostly confined to use as airport shuttles. The highly limited scope of this arrangement shows just how tough a time BYD will face in getting its electric vehicles into Western markets. Instead, the company’s best shot really lies in its home market of Shenzhen, a major Chinese metropolis, where the local government has already shown itself willing to act as a major backer for BYD’s electric dreams by building out major charging and other infrastructure to showcase and promote this technology, if it’s even worth showcasing at all. My guess is that this Frankfurt program won’t go too far, due to charging infrastructure limitations and high maintenance costs. But if BYD provides enough incentives, perhaps this could be the beginning of a deeper relationship down the road, though don’t look for profits from this or any similar overseas tie-ups anytime soon.
Bottom line: BYD’s new EV bus pilot program in Germany is largely a PR ploy, unlikely to yield any major business for BYD anytime soon.
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