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Warren Buffett's Chinese Cars Are Coming to the U.S.

BYD says that its electric E6 will have a range of 186 miles when it comes to the U.S. But will Americans buy a Chinese electric car? Source: BYD

Are you ready to buy Warren Buffett's Chinese car?

You might get your chance before long.

BYD Auto is a Chinese automaker that is partially owned by Warren Buffett's Berkshire Hathaway  (NYSE: BRK-B  ) . For several years now, BYD has been talking optimistically about its plans to export Chinese-made cars to the United States. Now, the company is saying that it will begin offering its cars to Americans by the end of 2015.

BYD has done some intriguing work with hybrids and electric cars. But BYD has a long history of optimistic predictions, and the company has had a rough time staying competitive even in its home market. But the Berkshire Hathaway investment has given the company some global cred. Is it time to take them seriously?

As Fool contributor John Rosevear explains in this short video, it's one thing to compete with other Chinese domestic automakers at the low end of China's huge auto market, another thing entirely to compete with the world's best on their merits. But that's what BYD says it's going to do: Does it have a chance? 

Would you buy a Chinese-made car? Check out John's report in the short video below. Then, scroll down to leave a comment and share your view.

A transcript of the video is below.

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John Rosevear:
Hey Fools, it's John Rosevear. Are you ready to buy Warren Buffett's Chinese car? You might get your chance before long.

BYD Auto is a Chinese automaker that is partially owned by Warren Buffett's Berkshire Hathaway. BYD has done a lot of interesting work around hybrids and electric cars, they actually have a substantial lithium-ion battery business as well as a solar panel division, but like a lot of Chinese automakers, their vehicles haven't really been ready for prime time, they've been at the low end, the inexpensive end, of the Chinese auto market and they haven't really had much export success, because they haven't been seen as competitive with the big global automakers in terms of things like crashworthiness and fit and finish. But they've gradually been catching up, as we've all expected, and now BYD says that it plans to introduce four models in the U.S. at the end of 2015.

This isn't the first time BYD has tried to come to the U.S., I could dig through the Motley Fool's archives and find articles I'd written saying they were coming by the end of 2010, or 2012, and those plans didn't pan out. But a BYD official told Bloomberg last week that the company will be much better prepared this time around. BYD says its cars are more fashionable, with improved design and safety features, and that the company is no longer planning to compete as a low-cost alternative, but want to compete on quality and innovation with the big global players.

BYD has a new plug-in hybrid sedan that will likely be its flagship here in the U.S., that car went on sale in Beijing last month. It costs around $31,000 and gets about 43 miles of range on its batteries before the gasoline engine kicks in, which is competitive with cars like General Motors' (NYSE: GM  ) Chevy Volt.

It remains to be seen whether cars that were both developed and manufactured in China will be able to get traction here in the U.S., but BYD isn't the only Chinese automaker setting its sights on the U.S. market. Geely Auto has said that it plans to export Chinese-made cars to the U.S. starting in 2016. But there's one big difference: Geely owns Swedish automaker Volvo, and the models it plans to bring to the US were developed with Volvo's help and may come here badged as Volvos. Volvos that happen to be made in China might have an easier time winning over U.S. customers than a Chinese brand trying to build a presence from scratch, but we'll see.

Certainly, a lot of automakers are going to be watching to see how this plays out, because I think a lot of the big global automakers would love to export cars from developing markets to the US.  It'll be interesting to watch, for sure. Thanks for watching, and Fool on.

Read/Post Comments (18) | Recommend This Article (8)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 11, 2014, at 10:53 PM, stardoz wrote:

    BYD has been making extravagant claims for years. Why should we believe that in 2015 they will deliver? Their products have yet to be exposed to a competitive market so it seems doubtful they will just emerge on the scene of one of the most competitive industries on the planet and have a smash hit. Time will tell.

  • Report this Comment On January 12, 2014, at 12:12 AM, dai wrote:

    BYD stand for Before Your Death .

    It is not a good Brand Name.

  • Report this Comment On January 12, 2014, at 12:55 AM, PeterPham88 wrote:

    Shame on you Mr. Warren for supporting an aggressor in South China sea whose behavior is exactly like Nazi and Empire of Japan prior to WW2.

  • Report this Comment On January 12, 2014, at 1:01 AM, Jimza1Skeptic wrote:

    Toyota and Honda cars came into the US around 1963 with the same skepticism, yet destroyed Detroit in the end. Yugo came and went in the 1980's living up to every joke thrown at it. Kia/Hyundai entered the US in the early 1990's again drawing skeptical looks, but are now well established although not held in the same regards as Toyota/Honda.

    The question is; Will BYD be a Toyota/Honda or maybe a mid-tier Kia, or will they be relegated to the Yugo status and disappear?

  • Report this Comment On January 12, 2014, at 1:14 AM, PeterPham88 wrote:

    Mr. Warren, shame on you.

    China´s massacre in Spratly islands [real footage 1988]

  • Report this Comment On January 12, 2014, at 5:14 AM, nitro624 wrote:

    I have lived in China for 8 years and if I were to buy a car today it would be a BYD. 8 years ago I wouldnt have but they have come up with some pretty cool looking cars lately. Buffet you get my vote.

  • Report this Comment On January 12, 2014, at 7:09 AM, ozzlefinch wrote:

    So what? Everything is made in China now anyway, including car parts. So they put the Chinese parts together in China, what difference does that make? Except of course to the American worker. But no worries, our government has the best interest of American jobs in mind, so the tariffs on the BYD will no doubt be so high and restrictive that consumers will see that American made cars will be price competitive. Right?

  • Report this Comment On January 12, 2014, at 9:45 AM, JosephLong65 wrote:

    OK, boys and girls, it really is time to bring manufacturing back to this country. China's thriving economy has hurt ours. Manufacturers and investors have been making millions and leaving our workers with minimum wage jobs. That needs to change. If it is time for a couple of shirts (for example), buy just one that is manufactured here. I look for the "Made in the USA" label on every product I buy. Decades ago we lost the electronics market to Japan. But here again (for example), audio speakers that are arguably the best, are still made here. Look for that label and buy them.

  • Report this Comment On January 12, 2014, at 11:13 AM, Chaseagee wrote:

    Just what we need more Chinese junk, and more money going to china.

  • Report this Comment On January 12, 2014, at 11:47 AM, axelred wrote:

    Warren Buffett's this is the biggest mistake that you ever did!

  • Report this Comment On January 12, 2014, at 12:00 PM, steelgreyruby70 wrote:

    We are beginning to think that all wealthy people are money sucking pigs, and that are no real Warren Buffets in this world. What a let down.

  • Report this Comment On January 12, 2014, at 12:13 PM, wademaniac wrote:

    I have been in the engine rebuilding business all my working life. I even did a lot of Forklift conversions from Gasoline to Propane so companies could run their Forklifts inside rather than just outside because of Carbon Monixide.Electric cars are not ready for prime time, because of the limit on the batteries and the cost effective expense that goes along with them. The industry have done nothing but copy the Electric Forklift with the EV-1 System. The switches alone are very expensive and do not last very long.All the controls are done with switches. Forward back speed etc,then there are fuse's. Going to the Batteries. They only last for a short time and you switch to gasoline. The electric recharge is not free. You have to pay for a recharge as well gas to make the car roll down the road. The Answer at this time and what is really coming is compressed Natural Gas (CNG).You can Keep your car and buy a conversion kit. You can even purchase a pump station to put in your Garage at home and have the fuel put on your house bill. They are safer than Gasoline tanks under your car as I1m writing this. You are driving a bomb. Tin tank with 20 gals of fuel with a flash point that will kill you. The CNG system have three safety valves to make sure they don`t explode. The pollution factor is greatly reduced, with almost no emmisions.This country has an extreme amount of CNG and we don`t have to go to any other country to buy oil. Why do you think they ( the oil company's are drilling holes all over the north part of this country for CNG )? It`s because they can see this a very qualified fuel to satisfy the EPA and the Global Warming people because it is the very thing that will work and everyone wins.Brazil,Iran,India etc are using it and selling us the oil because they have all their municipal equip running on CNG.Also a lot of personal autos. Some day they will make a battery that will last but not in my lifetime. The Keystone Pipeline for coal shale is a political mess and we don`t need to pipe shale to Texas. Why don`t they just build a refinery in North Dakota and refine it there.The cars that are going to come from China will fail.Just like Obamacare.As Christie and Teddy would say " BULLY "

  • Report this Comment On January 12, 2014, at 2:24 PM, Number1FordFan wrote:

    Isuzu quit selling cars in the U.S. because they didn't like the competition , If the Japanese company can't sell cars here, How in the world does the Chinese think they can sell cars here that have the "Made in China " label??

  • Report this Comment On January 12, 2014, at 2:42 PM, cmebillyc wrote:

    I am so glad to see that a lot of us is on the same page. We should boycott any products that are made outside of the United States. We need jobs here! and now!

    You would think that the people that we elect would want to help create jobs here and raise tariffs and quotas to ensure that the American economy would benefit, as well as, the American tax payers'.

  • Report this Comment On January 12, 2014, at 3:57 PM, samsplace5022 wrote:

    Since China adds huge tariffs and fees on US Cars, we could easily price them out of the market.

  • Report this Comment On January 12, 2014, at 6:04 PM, SkepikI wrote:

    If failing Auto companies can change the US from capitalist to Socialist, can expanding Auto companies in China change China from Communist to Capitalist? Just wondering....

  • Report this Comment On March 27, 2014, at 4:50 PM, squiggy2 wrote:

    I've been waiting for the chinese cars to come to the U.S. BUT, if the sticker price of their cars is the same as our cars, then why would I buy one? I'm looking for a decent car for LESS!

  • Report this Comment On July 10, 2014, at 7:58 PM, hotrodau wrote:

    Bit more behind this Buffett investment.The chinese founder of this company is an incredible clever guy and at the forefront of lithium battery technology

    We know Buffett is very energy concious and wanted to buy half the company,but was permited 'only' $300m stake, Why did he want this investment?

    Why has he been buying a railroad or 2 for $$billions?

    Not for the railroads certainly-but for the 'right of way'!

    New energy is coming-or certainly vastly different batteries and solar energy systems.

    It will change the world as we know.

    It is called Graphene.

    The car thing is only in its infancy and they make every part for their cars employing 10's of thousands-(doesn't believe in robotic production).

    Give all this time-and enjoy what happens.

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John Rosevear

John Rosevear is the Fool's Senior Auto Specialist. John has been writing about the auto business and investing for over 20 years, and for The Motley Fool since 2007.

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