Daimler is taking a 10 percent stake in Tesla Motors, a U.S. based electric car start-up, as it expands its green auto business, the head of Daimler’s research department said on Tuesday.

The German luxury auto maker is paying a double digit million dollar sum for the stake in the American firm, said Thomas Weber, declining to be more specific. Daimler had already partnered with privately held Tesla in January to develop battery packs and chargers for electric cars.

The carmaker was reacting with the deal to plans by President Barack Obama to increase auto fuel efficiency, Weber said. With the surge for climate friendly cars, Tesla has seen orders soaring and had said in February it expected to be profitable by mid 2009.

As part of its move into electric cars, Daimler is set to start production of the second generation of the electric version of its Smart minicar brand by the end of this year, Weber said. The first car of its main brand Mercedes Benz with an electric engine will be presented in 2010.


byd-electric-carWarren Buffett hasn’t just seen the car of the future, he’s sitting in the driver’s seat. Why he’s banking on an obscure Chinese electric car company and a CEO who – no joke – drinks his own battery fluid.

Warren Buffett is famous for his rules of investing: When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is usually the reputation of the business that remains intact. You should invest in a business that even a fool can run, because someday a fool will. And perhaps most famously, Never invest in a business you cannot understand.

So when Buffett’s friend and longtime partner in Berkshire Hathaway (BRKB), Charlie Munger, suggested early last year that they invest in BYD, an obscure Chinese battery, mobile phone, and electric car company, one might have predicted Buffett would cite rule No. 3 above. He is, after all, a man who shunned the booming U.S. tech industry during the 1990s.

But Buffett, who is 78, was intrigued by Munger’s description of the entrepreneur behind BYD, a man named Wang Chuan-Fu, whom he had met through a mutual friend. “This guy,” Munger tells Fortune, “is a combination of Thomas Edison and Jack Welch – something like Edison in solving technical problems, and something like Welch in getting done what he needs to do. I have never seen anything like it.”

Coming from Munger, that meant a lot. Munger, the 85-year-old vice chairman of Berkshire Hathaway, is a curmudgeon who frowns on most investment ideas. “When I call Charlie with an idea,” Buffett tells me, “and he says, ‘That is really a dumb idea,’ that means we should put 100% of our net worth into it. If he says, ‘That is the dumbest thing I’ve ever heard,’ then you should put 50% of your net worth into it. Only if he says, ‘I’m going to have you committed,’ does it mean he really doesn’t like the idea.”

This time Buffett asked another trusted partner, David Sokol, chairman of a Berkshire-owned utility company called MidAmerican Energy, to travel to China and take a closer look at BYD.

Last fall Berkshire Hathaway bought 10% of BYD for $230 million. The deal, which is awaiting final approval from the Chinese government, didn’t get much notice at the time. It was announced in late September, as the global financial markets teetered on the abyss. But Buffett and Munger and Sokol think it is a very big deal indeed. They think BYD has a shot at becoming the world’s largest automaker, primarily by selling electric cars, as well as a leader in the fast-growing solar power industry.

Wang Chuan-Fu started BYD (the letters are the initials of the company’s Chinese name) in 1995 in Shenzhen, China. A chemist and government researcher, Wang raised some $300,000 from relatives, rented about 2,000 square meters of space, and set out to manufacture rechargeable batteries to compete with imports from Sony and Sanyo. By about 2000, BYD had become one of the world’s largest manufacturers of cellphone batteries. The company went on to design and manufacture mobile-phone handsets and parts for Motorola (MOT, Fortune 500), Nokia (NOK), Sony Ericsson, and Samsung.

Wang entered the automobile business in 2003 by buying a Chinese state-owned car company that was all but defunct. He knew very little about making cars but proved to be a quick study. In October a BYD sedan called the F3 became the bestselling sedan in China, topping well-known brands like the Volkswagen Jetta and Toyota (TM) Corolla.

BYD has also begun selling a plug-in electric car with a backup gasoline engine, a move putting it ahead of GM, Nissan, and Toyota. BYD’s plug-in, called the F3DM (for “dual mode”), goes farther on a single charge – 62 miles – than other electric vehicles and sells for about $22,000, less than the plug-in Prius and much-hyped Chevy Volt are expected to cost when they hit the market in late 2010. Put simply, this little-known upstart has accelerated ahead of its much bigger rivals in the race to build an affordable electric car. Today BYD employs 130,000 people in 11 factories, eight in China and one each in India, Hungary, and Romania.

Its U.S. operations are small – about 20 people work in a sales and marketing outpost in Elk Grove Village, Ill., near Motorola, and another 20 or so work in San Francisco, not far from Apple. BYD makes about 80% of Motorola’s RAZR handsets, as well as batteries for iPods and iPhones and low-cost computers, including the model distributed by Nicholas Negroponte’s One Laptop per Child nonprofit based in Cambridge, Mass. Revenues, which have grown by about 45% annually during the past five years, reached $4 billion in 2008.

In acquiring a stake in BYD, Buffett broke a couple of his own rules. “I don’t know a thing about cellphones or batteries,” he admits. “And I don’t know how cars work.” But, he adds, “Charlie Munger and Dave Sokol are smart guys, and they do understand it. And there’s no question that what’s been accomplished since 1995 at BYD is extraordinary.”

One more thing reassured him. Berkshire Hathaway first tried to buy 25% of BYD, but Wang turned down the offer. He wanted to be in business with Buffett – to enhance his brand and open doors in the U.S., he says – but he would not let go of more than 10% of BYD’s stock. “This was a man who didn’t want to sell his company,” Buffett says. “That was a good sign.”


For centuries, people around the globe have used Earth’s heat: from relaxing hot springs baths to geothermal energy production for entire cities. But the resource has always been limited to areas with sufficient underground warmth. Now, as U.S. officials encourage the development of clean-energy technologies, the industry is developing new, more efficient ways to capture the Earth’s energy. VOA producer Zulima Palacio visited a plant in Utah with one of the latest and most promising technologies

The Prime Minister hopes to make Britain “a world leader” in producing and exporting electric cars and hybrid petrol-electric vehicles.

Trials for electric cars in two or three cities could be up and running as soon as next year, he said.

As part of the plan, the Government will also open talks with power companies to ensure vehicles can have their batteries recharged at power points at the roadside.

Alistair Darling, the Chancellor, is also planning to create 400,000 jobs in the green sector over the next five years. Other measures will include the Government relaxing planning rules to allow the building of more wind farms to ensure Britain hits its target to generate 15 per cent of its energy from renewable sources by 2020.

In a newspaper interview, Mr Brown kept open the option of a limited further fiscal stimulus in the Budget, but he hinted that the Chancellor might have to announce more tax rises to balance the books as public borrowing looks likely to rise from £118bn to around £150bn.

He said: “It is not just what we do to give real help now, but about setting a path for the future as well. We always take into account what we need and what is best future for the fiscal position.”

He added that the country could increase its output of environmental goods and services by 50 per cent to £1.5bn in the next five years.

Mr Brown said that a “scrappage” scheme where motorists would get up to £2,000 for trading in an older car for a cleaner new vehicle, was possible. He also said that he would consider buying electric cars for ministers as a means of setting an example.

Speaking of the environmental plans, he added: “This is a job creator, a quality of life improver and an environment-enhancing measure.

“We want to harness a desire among people to be part of this. A better Britain means building a greener Britain.”

He continued: “This is going to be a progressive decade. I think people do understand that some of the problems we had can only be solved, first of all, by governments working together with other governments, nations co-operating with nations. There is a new internationalism, a new strategic role for countries working together to solve common problems.

“There is a recognition that if we don’t invest in the future – in areas such as education and the environment – we will not have the future people want to see. Those countries that invest in the future will be the successful countries of the future. Those who simply want to cut public spending, rein back on investment, be isolated in Europe, will not meet the progressive challenges of our times.”

Mr Brown’s comments on the environment come as car manufacturer Jaguar Land Rover was granted a £340 million loan from the European Investment Bank to develop “green” vehicles, with a further £373m to be split between Nissan’s plants in Sunderland and Spain.

Despite the environmental optimism, it is thought Mr Darling’s Budget will offer little in terms of economic recovery.

Last November, at his Pre-Budget Report, he had hoped progress could be underway by this summer but the economy has performed worse than the Treasury had expected. Mr Darling is expected to speak of rising unemployment and a record national debt.


With a list price of $109,000, it’s a message a precious few can afford, acknowledged Rob Wilder of Encinitas, who got his Tesla last month.

tesla-roadsterRebates, tax credits and other incentives dropped his outlay to $79,000, but he admits that his car is “ridiculously expensive.” Tesla says Wilder got the 250th car produced.

 The Tesla Roadster is as sleek as anything on the road. Fast, too.

And it’s starting to pop up in San Diego as people who years ago decided they wanted a $109,000 electric car are taking delivery and turning heads.

“We want to show that green can be fun,” real estate agent Gregg Neuman said as he stood outside his downtown San Diego condo showing off the black Roadster he and his wife picked up a week ago.

“I knew I wanted to go to something that was green, something a little more responsible,” said his wife, Marietta, who commutes in the Tesla to San Diego State University to work as a nurse practitioner.

Tesla owners are the well-heeled pioneers in a movement that could change the way people drive, as some turn to the electric grid rather than the gas pump to power their driving.

Other plug-in cars from startup California automakers are due out this year – the Fisker Karma, to be made in Orange County, and the Aptera 2e, to be made in Vista.

Detroit’s first plug-in, the Chevrolet Volt, is expected next year, but the Obama administration, which has General Motors on a short leash after agreeing to prop it up financially, is concerned that the Volt will be too expensive to attract a lot of buyers.

Other carmakers – Chrysler, Ford, Mitsubishi, Nissan, Saturn and Toyota – also plan to sell plug-in cars in the near future.

But for those who have the cash and the foresight, the Tesla is the first out of the blocks.

Able to go 0-60 in less than four seconds, and with a top speed of 125 mph, the two-seater built by a Silicon Valley startup company embodies the idea that green can be fun.

With a list price of $109,000, it’s a message a precious few can afford, acknowledged Rob Wilder of Encinitas, who got his Tesla last month.

Rebates, tax credits and other incentives dropped his outlay to $79,000, but he admits that his car is “ridiculously expensive.” Tesla says Wilder got the 250th car produced.

But its purchase should help the company develop more affordable cars, said Wilder, whose company, WilderShares, tracks renewable energy stocks.

“The point is to try to get these things down to $30,000,” he said. “To do that, you have to start somewhere.”

Tesla spokeswoman Rachel Konrad compares her company’s development plan to those of gaming consoles or cell phones, extravagantly expensive when introduced.

“If you didn’t have the early, affluent buyers, the companies wouldn’t have had the seed money to make lower-priced versions for the rest of us,” she said. “The goal of the company is not to sell a bunch of six-figure sports cars. . . . The goal of the company is to advance the electrification of the entire fleet that all of us drive.”

Tesla was founded in 2003 by Elon Musk, who made a dot-com fortune from selling PayPal to eBay. With funding from other tech entrepreneurs, including Google’s founders, the company set out to do what Detroit had not – build an electric car that people would buy.

The company is counting on a $350 million federal loan to build a Southern California factory for a passenger car and another $100 million for a plant to make battery packs for other carmakers.

In those applications, Tesla has joined other manufacturers vying for $25 billion in fuel-efficiency funds the Energy Department says should be disbursed soon. It’s unclear who will get that money, though some analysts like Tesla’s chances.

A few years ago, Wilder said he talked to Detroit executives, who told him Tesla would fail before he got his Roadster.

“They just didn’t believe you could put a car together like this,” he said.

“Now I drive one and I want to get back in touch with these people and say, ‘Hey, it’s here!’ ”

Scott Chalmers got Roadster No. 53 in December for his commute from La Jolla to Kearny Mesa, where his company makes industrial testing equipment.

“I thought it would be nice to have something that was more than just a car,” he said. “It was something that was helping to forward technology.”

Chalmers paid full price years before the car was produced to be among the first 100 to take delivery.

“I like it more and more the longer I’ve had it,” he said. One of the big surprises is the sound of the car. With no loud exhaust system, it whirs rather than rumbles.

The drive is also different. Because electric engines are powerful at low speeds, there’s no need for gear shifting.


“It’s like a Disneyland ride,” Wilder said.

But perhaps the biggest difference is the power source.

Wilder uses solar panels to power his house – and his car – and isn’t stopping with the Tesla. He is planning to buy a Fisker and an Aptera.

“Once you drive an electric, who wants a gasoline car?” he said. “They’re slow, they require all the maintenance, they need gasoline. Who needs that?”

Tesla says the Roadster has a range of 240 miles on about $4 worth of electricity. It charges in less than four hours from a 220-volt connection, and is designed to charge at night.

San Diego Gas & Electric will install separate meters for electric cars so customers can take advantage of lower rates.

Tesla last month announced a family car, the Model S, which it will retail in 2011 for $57,400, though a $7,500 federal rebate would lower the price to $49,900.

Even at half the price of the Roadster, the Model S is not a car most people can afford, said Ron Cogan, editor of greencar.com.

“The question is how much will that car really be, compared to a gasoline or clean-diesel version,” said Cogan, a former editor at Motor Trend magazine. “I just don’t see how it can be done in an affordable way.”

The big problem, no matter who is making the cars, is the battery pack. Cheap lead-acid batteries are heavy and don’t store much power. Lithium-based batteries are lighter, but expensive.

For example, the 6,831 lithium-ion cells in the Tesla Roadster weigh 1,000 pounds and make up a third of the car’s cost. You can absorb a $25,000 battery pack in the cost of a luxury car, but not family car, Cogan said.

Konrad said people thinking about the cost of electric cars have to take into account lower fuel and maintenance costs – fewer moving parts, no oil changes, no smog testing.

Carlsbad’s Aptera is planning to begin production of a three-wheeled vehicle that looks like a wingless airplane and sells for $25,000 to $40,000.

Aptera says it is battling the battery problem by making a light, aerodynamic two-seater that won’t require as much energy as traditional designs. Less energy used means lighter batteries, and a more affordable vehicle.

“That’s our goal, to get these in people’s garages,” company co-founder Steve Fambro said.

Aptera has taken $500 deposits from about 4,000 customers and plans to have its Vista assembly line cranking out cars by October, a delay from earlier target dates.

“For us to really make a difference, we want to sell tens of thousands, hundreds of thousands,” Fambro said.

Last night, almost 1,000 deposit holders fawned over Aptera prototypes at an event in Balboa Park. Devoted followers, many of whom drove from Los Angeles and Orange County, had their pictures taken with the car and talked with company executives.

“Thank God I can finally find a car that makes sense,” said Anthony Mack, who is confident his number – 888 – will come up late next year and he’ll get his car.

Getting a big market share will take some doing, Cogan said.

“It takes a leap of faith for people to move to very futuristic designs,” he said. “Changes have been evolutionary, not revolutionary. . . . People want to be reassured they’re driving a vehicle that fits their image, will be accepted by their peers, has a good resale value.”

Still, he’s bullish on the Chevrolet Volt, and calls the Fisker Karma a more upscale version of the same concept – a plug-in car that initially runs on battery power and then switches to a gasoline generator.

“You can drive this car for as long as you want to – as long as there is fuel available to you,” said Dave Grunsdtrom, chief executive of Marvin K. Brown Auto Center in Mission Valley, which has signed up as a Fisker dealer.

At $87,900, the four-seater will go 50 miles on battery power.

“There’s going to be a market for plug-in hybrids,” he said. “Fisker will be the first one that will really meet the needs of a luxury buyer.”

For many, the real question is what are they trying to achieve.

If it is to get a big bang for their buck while reducing greenhouse gases, a fuel-efficient small car makes more sense than a hybrid, Cogan said.

“These are the vehicles that might make the difference in the short run,” he said. “Those cars exist today, but people are not thinking of that. Too many people just don’t understand what choices are available today that fit their needs and accomplish their goals.”


Looking at building a green home? Learn the principles and guidelines for choosing materials and systems that can help you conserve energy, water and dollars.

China is to go head-to-head with America in producing electric vehicles thanks to investment of around £1 billion in the sector during the next three years. It is hoped that around 500,000 electric chery-automobile-s18and hybrid cars will be produced each year by 2011, representing a ten per cent average annual market growth. There is speculation that the Chinese car market will overtake Japan to become the world’s second largest car market this year and pass America to be the world’s largest within 12 years.

The funding for electric cars is part of a huge investment of £20 billion in alternative fuel vehicles before 2012.

The money will serve to develop, promote and maintain public transport vehicles powered by alternative fuels. China has recently announced that 60,000 alternative-fuel vehicles will be tested in 11 cities.

The proposal also includes plans to boost the ownership of green private cars through preferential tax rates for car makers who develop fuel-efficient cars and consumers who buy low-carbon green cars.

The Chery Automobile Company is the largest domestic car producer in China and the S18 model its first foray into the electric car market.

The S18 is able to travel up to 90 miles on a single charge. It can be fully charged in four to six hours from a household socket.

A spokesperson for the Environmental Transport Association (ETA) said: “Electric cars have made little impact in Britain partly because of their limited range, but China is going to transform the market with this new crop of green vehicles.”


The Aptera may be the vehicle of the future. As Daniel Sieberg reports, it is an electric three-wheeled vehicle with a futuristic design.

“It takes 10 or 15 minutes to fast charge, which isn’t going to be much quicker or slower than nissanelectricvehicleswapping a battery, and certainly a lot less moving parts and potential points of failure. Let alone the capital costs required to build a battery swap infrastructure,” he said. “Batteries are going to get larger. Range is going to get greatly improved. The amount of energy that you’re going to pour into a vehicle in a given timeframe is going to increase shortly.”

The prospect of electric cars that can be recharged within 10 to 15 minutes moved a step closer last week with the announcement of a new pilot project in Arizona.

Car giant Nissan announced that it has signed a partnership with electric vehicle charging technology firm ECOtality and Pima Association of Governments, which represents the Tucson, Arizona region, that will see the three parties work together on rolling out a charging network.

ECOtality said that it would aim to have parts of the public recharging infrastructure rolled out by 2010, in readiness for the US launch of Nissan’s zero emission vehicle. Nissan added that under the agreement it would then make a supply of electric vehicles available to the regions public and private fleets.

 In an interview with The Cleantech Group, ECOtality President and chief executive Jonathan Read, also used the launch of the new working group to lay down the gauntlet to recharging network rival Project Better Place, arguing that fast charging technologies such as those being trialled in Arizona will prove more convenient and cost effective than Project Better Place’s battery swap model.


He added that attempts to develop standardised batteries that can be swapped in and out of cars when they are flat would be hampered by the rapid rate of battery development.

“I don’t think we’ll ever get to a situation where we have unitary batteries, as envisioned by Better Place, because there will always be new technologies, with companies vying to be better than the next,” said Read.

Nissan said that it was not wedded to either approach, but did argue that fast charge networks could be rolled out with a lower capital cost.

The car company is planning an electric commercial van for 2010, an electric sedan for 2011 and a fordelectriccarsplug-in hybrid SUV for 2012. Beyond those plans, Mullaly believes that ten years will bring a substantial improvement in the internal combustion engine and, more importantly, that the focus across all car companies will turn to all-electric vehicles instead of hybrids.

At a recent economic conference, Ford’s CEO Alan Mullaly told reporters “in 10 years, 12 years, you are going to see a major portion of our portfolio move to electric vehicles.”

In the interview he stated that he believes low oil prices are only temporary and that prices will continue to go up over time.

It has taken the big auto companies a while to figure all this out, but I’m glad that they’ve finally come around. Let’s hope this is a sign of a major turn-around for Ford and the rest of the American car makers. I’m looking forward to the future if this is true.


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