MidAmerican Energy Holdings Co., a subsidiary of Warren Buffett's Berkshire Hathaway Inc., plans to invest about $230 million in BYD Co., a Chinese car and battery maker, the companies said Monday in Hong Kong.
Des Moines, Iowa-based MidAmerican has agreed to buy 225 million shares, which represent a 10-percent stake in the public traded BYD. The company, founded in 1995 and based in Shenzhen, China, operates two divisions: information technology and automobiles.
BYD claims to be the world's largest maker of nickel and lithium-ion batteries for cell phones, counting Nokia, Motorola and Samsung among its customers. The company also develops and makes other cell-phone parts.
But MidAmerican's interest in BYD lies in the Chinese company's battery development for storing solar and wind power, said David Sokol at a press conference in Hong Kong (via Bloomberg).
Lithium-ion batteries have become the energy storage of choice for some electric carmakers. Lithium-ion batteries can hold more juice than other types of car batteries today, but lithium-ion is much more expensive.
BYD entered the car business in 2003 with the acquisition of the Tsinchuan Automobile Co. The company, which has been selling gasoline-powered cars, intends to build a plug-in hybrid electric car by the end of this year, the New York Times reported last month.
In January, the company said it would launch vehicles using its batteries in October, and would bring them to the United States in three to five years (see Automakers Vie for Green Cred).
BYD, which is also developing all-electric models, has bumped up its timeline and would like to sell its hybrid cars in the United States by 2010, according to the New York Times.
The company claims that its batteries could give hybrids a range of 250 miles and the ability to recharge 50 percent in 10 minutes, and could be added to hybrid and electric cars for $6,000.
Overall, BYD has seven manufacturing centers in China and employs about 130,000 workers worldwide.
The Chinese company generated RMB$21.21 billion ($3.1 billion) in 2007, up 64 percent from RMB$12.94 billion ($1.89 billion) in 2006, according to the company's annual report. BYD made a profit of RMB$1.70 billion ($248.37 million) in 2007, compared with RMB$1.13 billion ($165.1 million) in 2007.
Chinese customers accounted for 64 percent of its sales in 2007, while Europe and the United States represent 10 percent and 7 percent of its sales for the same year. BYD's annual report doesn't breakdown the geographic regions for the remaining 19 percent.