In this age of scary headlines about disappearing arctic polar caps and climate change, it's reassuring to see the two richest business people in China are both in environmentally-friendly businesses.
The latest
rich list names electric car battery tycoon Wang Chuanfu, born into a farming family, as the richest man in China. He has a 5.1 billion dollar fortune. Number two is paper recycling queen Zhang Yin, who imports recycled paper and sends it back as packaging for exports.
Wang shot to the top of the rich list with the help of Warren Buffett. Last year Buffett invested $230 million dollars in BYD. That inspired other investors to pile on giving Buffett a $1 billion profit, at least on paper.
Wang Chuanfu is a late comer to the race to build an affordable electric car, but according to a bullish article by
Fortune, he's whizzing ahead of the competition. Last year he became the first automaker to launch mass production of a plug-in hybrid electric vehicle.
An upcoming car, the
E6, can reportedly travel 250 miles on a single charge from the regular socket in your garage, compared to the usual top range for electric cars of 50 to 100 miles. Proprietary "quick charge" technology should enable a 50% recharge in 10 minutes.
The vehicle can go from 0 to 60 mph in 8 seconds, and reach a top speed of 100 miles per hour. All this, for about $20,000. What a deal!
BYD was able to develop lithium-iron-phosphate batteries for the F3DM cars by taking advantage of the China cost-- investing in about 10,000 engineers at monthly salaries of around $700.
Better yet, BYD has developed a nontoxic electrolyte fluid making his batteries 100 percent recyclable. And true to his humble roots, Wang runs a frugal operation-- not many fancy executive privileges a la Detroit.
The company now says it'll overtake Toyota by 2025 to become the world's biggest auto company.
Wow! It's nice to feel the humble environmental good guy can not only help save the world-- he can even get rich doing it!
But some of my warm fuzzy feeling disappeared when I scratched beneath the headline.
Consider the following:
Sales so far for the F3DM plug-in Hybrid, less than 100. So much for its 3,000-4,000 sales projection for this year. By the way, few in China, now the world's largest auto market, have any where to plug in the car, even if they can afford the $22,000 price tag. That's more than double the cost of BYD's similar sized gas-guzzler in China.
In China, BYD sold only
246,881 gas-fueled cars in the first three quarters of this year. GM sold 814,442 vehicles, followed by Volkswagen, with 652,436.
BYD plans to roll out its E6 in the U.S. next year. Investor
Ravi Nagarajan has some nice things to say about the car and its potential in the U.S. But some analysts are throwing cold water on the story.
Morgan Stanley analysts Jasmine Lu and Tim Hsiao write: "We do not think BYD can commercially roll out its electric car into the US market, because of the rigorous safety requirements and longer warranty required... We believe this is more a marketing effort to raise brand awareness for BYD's car in the US; initially it will target government agencies, utilities and some celebrities in a specific region."
For the sake of the environment, I hope they're wrong.