Sep 29 2008

Warren Buffett Buys Stake In Chinese "Green" Car Maker

Posted by: Leonard Anderson

Billionaire investor Warren Buffett is making another energy play, announcing on the weekend that his MidAmerican Energy Holdings Co. will purchase about 10 percent of China's BYD Company Ltd., a maker of rechargeable batteries and automobiles, for $230 million. The move -- Buffett's first strategic investment in China -- follows MidAmerican's announcement earlier this month that it would acquire East Coast utility Constellation Energy Group Inc. for $4.7 billion. 

MidAmerican and BYD will work on new rechargeable battery technologies for vehicles and to store electricity from wind and solar power generation. "The rationale behind this investment is BYD's unique exposure to both lithium-ion batteries as well as its related hybrid electric vehicle business," Merrill Lynch analyst Daniel Kim told Bloomberg News. The "HEV market growth is exploding."

BYD aims to sell gasoline-electric hybrid cars in China later this year and to introduce hybrid vehicles in the U.S. and Europe in 2010. The Big Three U.S. automakers are scrambling to develop hybrids, and they got a boost on the weekend when the Senate approved a spending bill that included $7.5 billion to start a $25 billion low-interest loan program to retool old plants and help the industry develop new fuel-efficient vehicles. The House has already approved the bill.

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