Investment

Sliding BYD gets US spark

By Wang Chao (China Daily)
Updated: 2010-10-28 11:09

A model poses next to a BYD car at a recent auto show in Suzhou, Jiangsu province. BYD's net income for the third quarter fell to 11.3 million yuan ($1.7 million) from 1.2 billion yuan a year ago. Li Junfeng / For China Daily

 

BEIJING - Duke Energy Corp on Monday signed a Memorandum of Understanding with BYD Co, a leading electric car manufacturer in China, to help further develop the environmentally friendly cars, according to a Duke Energy executive on Wednesday.

"We are going to collaborate on the infrastructure of electric vehicles and energy storage," said David Mohler, senior vice-president of Duke Energy, who is in Beijing for a forum.

Duke Energy, which is based in the state of North Carolina, is the fifth largest electric utility holding company in the United States. It is also the largest power generator in the Americas, with $13 billion in operating revenues and $57 billion in assets.

The deal came after Hong Kong-listed BYD announced a 99 percent decline in its third-quarter earnings. The financial report shows that net income for the three months fell to 11.3 million yuan ($1.7 million) from 1.2 billion yuan a year ago.

Duke Energy hasn't decided on an amount for its investment into BYD Co.

"What we are doing is sharing the information of electric vehicles and looking for ways to jointly invest in further technology development," he said.

But Mohler said plug-in electric vehicles - which BYD has expertise in - will be a catalyst for smart grid development. "By doing this, charging stations will be the first truly connected appliances," he said.

The fluctuation of BYD's recent performance doesn't seem to bother Duke Energy.

"We are here to learn from our Chinese counterparts, since China is building so many new energy programs on a large scale," Mohler said. "The risks of making partnerships with Chinese companies are very low, since we are not making real investments yet; our major business is still in the US."

Mohler said he hopes to reach an international standard on electric vehicles through partnerships, which facilitates cross-border purchases.

Duke Energy's other partnerships in China include Huaneng Power and State Grid.

Wei Weixian, director of the Energy Study Center at the University of International Business and Economics, was optimistic about the partnership.

"Although BYD encountered some difficulties in its operations, this cannot stand for the whole industry, since electric car development is still a long term strategy in China," Wei said. "Duke Energy saw the huge potential in the Chinese new energy market, so it chose BYD, the icon of the Chinese electric vehicles."

China Daily