Over the weekend, Chinese media reported that BYD is making a huge investment in crystalline silicon (c-Si) solar cell manufacturing. The goal is to build out five gigawatts of annual capacity by 2015, at a cost of $3.3 billion. Work reportedly began last year, so this plan is very much in motion.
To put this effort in perspective, Suntech Power's (NYSE:STP) solar cell and module capacity is targeted at 1.4 gigawatts by mid-2010. BYD could thus overtake even China's largest solar player by the middle of the decade.
If you're not familiar with BYD, this is the battery maker/plug-in hybrid car manufacturer that Warren Buffett has called "amazing," and whose CEO Charlie Munger has likened to "a combination of Thomas Edison and Jack Welch." Berkshire Hathaway (NYSE:BRK-A) (NYSE:BRK-B) invested in the company in late 2008 and is sitting on a massive gain.
BYD beat out a slew of industrial powerhouses to become the world's biggest manufacturer of mobile phone batteries. The company has now quickly ascended the ranks of China's carmakers, with its F3 model becoming the top-selling sedan in the country. The company aims to be the world's biggest carmaker by 2025.
Compared with that goal, leading the Chinese solar pack doesn't sound all that ambitious. The barriers to entry in solar cell manufacturing are nonexistent, so I see no reason why BYD can't challenge the likes of Suntech, Trina Solar (NYSE:TSL), and Yingli Green Energy (NYSE:YGE) for dominance in this sector.
If I were one of the incumbents, I would be more than a little scared.
