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As it turns out, the first car company to reach the market with an actual, workable electric car will not be based in Detroit, but in Shenzhen. BYD is the name, and it's got two objectives:
- Attract investments from Berkshire Hathaway (NYSE: BRK.A ) (NYSE: BRK.B ) .
- Build a plug-in hybrid a year before Toyota (NYSE: TM ) brings its first attempt to market, and two years ahead of GM.
That's not even the bad news
GM may have a little bit of breathing room here, courtesy of BYD's cautious plan for rolling out the "F3DM." BYD has begun selling the vehicle in China, and it intends to bring the F3DM to the U.S. by 2011. That should give GM one year to begin gobbling up market share and shedding its reputation as a gas-guzzling SUV-hawker -- if Toyota doesn't beat it to the punch, and if Ford (NYSE: F ) and Chrysler don't step up their game in the interim.
However, even if GM meets its own deadline for introducing the Volt, its offering could quickly be supplanted by BYD's, which appears to offer numerous advantages over the Volt. Whereas GM's electric car aims to travel 40 miles on battery power alone, and has an estimated selling cost of around $40,000, the F3DM is targeting 62 miles of engine-unassisted mileage, and a starting cost of $22,000.
It gets worse. For one thing, BYD hopes to push up its date of entry into the U.S. market, provided it can pass necessary inspections faster than expected. BYD also comes with a built-in cost advantage over GM, beyond the usual labor and benefits costs: materials. BYD, you see, is China's leading manufacturer of rechargeable batteries, competing in this market with Japan's Panasonic (NYSE: PC ) and Sanyo, as well as national rival China BAK (Nasdaq: CBAK ) . In contrast, GM is still buying its batteries abroad, and working with third-party suppliers to develop a new battery to power the Volt.
If you're betting on the Volt to save GM, make sure to bet small.
Further Foolish fuel on electric cars: