Even Warren Buffett was duped
Crappy cars, stolen designs and a possible dud of a battery highlight the state of BYD according to recent analysis that calls into question not only Warren Buffett's $232 million investment into BYD, but also the entire state of Chinese-made plug-in vehicles.
Were investors duped? Does BYD really know how to make a quality battery for plug-in vehicles? Is China poised to become a world leader in battery-powered autos?
Those were just a few of the questions that ran through my mind as I read BYD terrible bet for Buffett. But what's even more scary is the house of EV cards that China is currently playing with the US and other major automakers.
Outwardly, the Chinese government is proclaiming a big government incentivized move to more fuel efficient vehicles in China. Unfortunately, it's becoming obvious that Chinese companies simply don't have the experience to achieve such a goal and current electrified efforts – mostly failures and missed timelines – from highly publicized companies like BYD are exposing this shocking reality.
Alarmingly, that makes the fact that China is requiring strict partnership rules for non-Chinese companies – including full technology sharing – quite disconcerting. Quite simply, it seems China is telling the world they are going to steal the best technologies in return for access to their markets, and they're going to do it with or without permission. Ultimately, it seems China believes the rest of the world needs China's auto market more than China needs the rest of the world's auto markets – at least for now.
Ironically, maybe Buffett wasn't duped at all. Instead, perhaps he was betting that the shrewdness of Chinese manufacturing and government policies would eventually prevail because he knew China's potential auto market would simply be too alluring for major automakers like GM. As in the past, China is probably betting that short term profit margins will be more important than the long term dangers to the West.