Bad Year for Buffett-Backed BYD
A missed sales target caps a tough year for shares of BYD, the Chinese electric car company backed by Warren Buffett's Berkshire Hathaway.
BYD tells Bloombergthat it will sell between 520,000 and 550,000 cars this year. That's below the already-reduced target of 600,000. In August, BYD cut that goal by 200,000 vehicles.
The Chinese company has started a trial programwith the Los Angeles Housing Authority for an electric car fleet and it still expects to sell its K9 electric bus in the U.S. in 2011. Sales in the U.S., however, of the E6 electric car are now planned for 2012. That's two years behind schedule.
At today's close of HK$40.50, the Hong Kong listed stock has lost half its value since early April, when it hit its 2010 high just above HK$80.
Berkshire's 225 million share stake, purchased for $230 million in September of 2008 at the height of the credit crisis, is still very profitable on paper.
But Berkshire's current gain on the deal of about $934,000 puts the black ink below $1 billion for the first time since the summer of 2009.
At BYD's peak in October of 2009, Berkshire's paper profit soared to almost $2.3 billion.
Buffett showed his support for BYD with a celebratory visitduring his September trip to China.
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