BYD Planning For First Brazilian Factory To Open In 2015
One of the major players in the EV industry, BYD Auto, is now currently aiming for its first Brazilian (and first South American) manufacturing plant to open sometime in 2015.
The factory — which is set to be built in the city of Campinas in the São Paulo region of the country — will cover the whole manufacturing and assembly process of the company’s highly touted long-range EV buses, including the recyclable Iron-Phosphate battery packs that they use.
The factory will be built with an investment of around R$ 200,000,000 ($89.5 million), and will result in the creation of somewhere around 450 new local jobs.
“In the first year of operation (starting in 2015), the plant will have a maximum production capacity of 1,000 electric buses as well as all of their batteries,” stated BYD Brazil’s General Manager Tyler Li. “This is the first stage of manufacturing expansion. BYD chose Campinas because of this city’s spirit of innovation and their goal of building a cleaner society. Along with the buses and batteries, our dream is to build solar panels and energy storage systems here to help the region achieve their zero emissions goals.”
BYD’s Founder and Chairman, Wang Chuanfu, echoed that statement: “BYD chose Campinas because of this city’s spirit of innovation and their goal of building a cleaner society. Along with the buses and batteries, our dream is to build solar panels and energy storage systems here to help the region achieve their zero emissions goals.”
The two (as of now) manufacturing facilities will cover about 32,000m2, and 20,000m2, respectively. In addition to said facilities, the planned “second phase” of BYD’s development at the site will include an R&D center for the company’s related businesses (solar PV, smart-grid, and LEDs).
Jonas Donizette, the Mayor of Campinas, chimed in on the subject: “BYD fits very well in our City’s quest to attract investments, it is a company that produces goods and technologies related to the use of renewable energies, and also operates in key segments for the future of cities with sustainable urban mobility plans.”
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A bold move. BYD has only sold two buses (out of 16,000) to São Paulo as a trial. They must be very confident of their market. Brazil’s cities are very dependent on buses; Rio, a city of 6 million, only has two metro lines, with one extension under construction for the 2016 Olympics. Brazil is quite protectionist, and high local content is required for public financial aid from the giant development bank BNDES. The Mercosur free trade area will give BYD some access to Argentina and Chile, but not much to more northerly countries like Venezuela. However, the announced investment is not very large fo rth escal reof production. Bus-making is labour-intensive, apart from the batteries.
James:
You seem to be quite knowledgeable about this topic.
I am from Canada and I would love to see electric buses here.
Do you have any figures on cost per mile for electric buses versus gas powered buses?
Electric vs diesel cost: It depends. In Argentina they can sell diesel for next to nothing, electricity may be expensive if a country has no hydro resource. But for Ontario, for instance. Diesel is $1.20/litre. Electricity 13 cents/kwh. The streetcars of Toronto are all electric without battery so they are orders of magnitude cheaper than a diesel bus …maybe 15% of the fuel cost. Electric battery bus has advantages of roaming off grid. They have a few in Vancouver, as well as their 60 year old infrastructure of wired electric buses. They are also a fantastic efficiency compared to the catastrophe that is called a diesel bus in a densely populated downtown area. Urban diesel is madness for public health (particulates are hard on the lung). As well they are 4 to 5 times they cost to operate and maintain. Remember that electric engines have very little maintenance requirements.
Vensonata:
Thank you so much for your reply. Yes, Toronto has electric street cars but they require overhead wires and steel tracks to handle the return current. The tracks make a mess of the road and limit the movement of the street cars that can not swing in to the curb like a bus on tires.
Mississauga (just west of Toronto) has a few hybrid buses and most run on a mixture of gas and biofuel. I am guessing a lot of the cities in the Greater Toronto Area are of that model.
So It would strike me that there would be huge savings with all electric. We have a lot of nuclear power that is highly available at night so night time charging would be welcome.
To quote an earlier post on this site (link):
“BYD and MTA [the New York transport authority] claim that the expected operating-cost-per-mile of an electric bus is about $0.20 to $0.30, compared to $1.30 per mile for an equivalent diesel- or natural-gas-powered bus in New York.”
I don’t think there’s any real doubt about the massive operating cost advantage. The MTA is a customer not a vendor, and its datum is very credible. The initial cost is however much higher – so bus operators have to balance the two. Since we have not yet seen large orders from any of the many cities outside China that have tried out BYD buses successfully, we can safely assume that the total cost still works out a little higher. So it’s a matter of how the cities weight the environmental benefits and attractiveness to riders.
We can certainly hope that the large Chinese orders will put BYD on a learning curve and its prices will drop, at which time the switch becomes a no-brainer and Warren Buffett (a strategic investor) laughs all the way to the bank.
James:
Thanks. Your answer is very helpful.
And I am glad that Warren Buffet is investing in these things and when they payoff he deserves it.
Thanks again.
Buffett’s Berkshire Hathaway investment company took a 10% stake in BYD in 2008, according to Wikipedia. The share price is up 600% since. His worry must be that the company will spread its energies too thin, for example in electric cars where the competition is much fiercer. It looks to me as if they have the bus market nailed. The K9 is an outstanding product, and the next iteration will be even better.
James:
Is one of the problems availability?
Toronto has 2228 rubber tired buses and of these 691 are hybrid. They are trying to convert more to hybrid. But why not convert to all electric?
I am wondering if China’s factories are fully committed to their domestic market?
If that is the case, maybe we should be lobbying for a factory in Canada,
Why not Venezuela? They gained member status of Mercosur in 2012. Also I’d say they may have access to Colombia due to the push by Bogota to become more bus transit friendly. Either way as you point out this is a BFD for China to get involved in bus making in South America.
I stand corrected! In mitigation, I plead that the Latin American institutional landscape is very complicated, with multiple overlapping organisations, of which Mercosur and the Andean Pact are merely the most important.
Agreed totally.
Why would they consider any country but Brazil to put it in?
The rich countries where they have the best possibilities to sell buses are Argentina Brazil and Chile. The economical advantages that you talk about + cheap labor combined with technical know-how and cheap energy.
Venezuela has almost free gas and very little incentives to change unless the state goes in and buys the buses.
It seems like a no-brainer to but a factory there if they have the money to spare.
Update: Volvo, which has already sold 1,600 hybrid buses, has anounced an all-electric bus for 2015 (link).. Volvo is a much more serious competitor to BYD than Proterra. But it’s still four years behind into production.
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