Just a few days ago on October 24, BYD, a Chinese automaker partially owned by U.S. billionaire Warrant Buffett, officially opened its new North America headquarters in Los Angeles, about a year behind schedule with fewer workers than first targeted. BYD’s plan is to make its LA headquarters the center for the growing market for electric cars. Initial goals were that it would open the office by the end of 2010, and have 150 employees by the end of this year. It now has 20 employees in Los Angeles, with plans to reach 30 by year-end and 100 by the end of 2012. The delay reflects an electric-car market that hasn’t developed as rapidly as first expected. BYD expects to begin selling its e6 electric vehicles exclusively in California at first, eventually expanding to more states, and plans to deliver the car to fleet operators as early as next year.
China’s auto sector overtook the U.S. in 2009 to become the world’s largest and last year sales rose more than 32% to a record 18.6 million units. But the sector has since lost steam after the government phased out sales incentives such as tax break for small-engine vehicles, originally introduced to ward off the impact of the global financial crisis. Earlier this year, President Obama said by 2015 the federal government’s fleet of 600,000 vehicles would run on some type of alternative fuel. Besides that, General Electric has said it will purchase 250,000 electric vehicles by 2015. Still, one significant issue that the green carmakers are facing is unwillingness of consumers to pay any kind of a price premium for an electric vehicle. Specifically, a considerably large portion of American consumers will not pay more for an electric vehicle than they currently pay for a comparable vehicle with a gasoline or diesel engine. Currently China and the U.S. are the world’s two largest auto markets.