Warren Buffett-Backed Electric Vehicle Maker Plans Battery Unit IPO





(Bloomberg) -- BYD Co., the electric-car maker backed by Warren Buffett, plans to list its battery business by 2022 to raise funds to expand as the global auto industry transitions away from the traditional combustion engine.

The listing will occur sometime by the end of 2022 and the company hasn't decided yet where the shares will be trading, Chairman Wang Chuanfu said in an interview with Bloomberg News Wednesday at its headquarters in Shenzhen. BYD, which makes batteries for automobiles and mobile phones, is in the process of spinning off its vehicle-battery operations into a separate company before listing. It isn't clear yet whether the IPO will be for the car-battery business alone, or will also include other units.

Batteries are emerging as a key part of the electric-car revolution that's causing the biggest disruption to the auto industry in more than 100 years. Contemporary Amperex Technology Co., or CATL -- the world's biggest battery maker -- has more than tripled in value since raising more than $800 million in its Shenzhen IPO in June, as investor cash gravitates toward the industry. BYD and CATL are China's key makers of power packs for electric vehicles and are emerging as challengers to Tesla Inc. suppliers Panasonic Corp. and LG Chem Ltd.

Wang, the billionaire founder of BYD, estimated that the country would need to boost battery-manufacturing capacity by about ten-fold to 1000GwH a year by 2030 if China fully electrified transport.

The company, which has been self-sufficient in making batteries for its own vehicles, started discussions last year with other carmakers for contracts, Michael He, vice president of the battery business, said in an interview.

Buffett's Berkshire Hathaway Inc. is the largest shareholder in the Hong Kong-traded stock of BYD, with a 24.59 percent stake. Buffett made the bet two years before Tesla listed in New York.

BYD is working on a plan to build vehicle-battery factories in both Europe and the U.S. In Europe, the company is looking at possible locations in the U.K. and Germany, He said. The company is also talking to potential domestic and foreign investors for fundraising ahead of the IPO, He said without elaborating.

To contact Bloomberg News staff for this story: Matthew Campbell in Shenzhen at mcampbell39@bloomberg.net;Tian Ying in Shenzhen at ytian@bloomberg.net

To contact the editors responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net, Ville Heiskanen

For more articles like this, please visit us at bloomberg.com

©2018 Bloomberg L.P.

COMMENTS

More Related News

Trump Seeks to Take Back Funds From California Rail Project
Trump Seeks to Take Back Funds From California Rail Project

In addition, the U.S. Transportation Department said it was exploring legal options to recoup $2.5 billion in federal funds already granted to the project by the Federal Railroad Administration, according to a DOT statement. Initially conceived as connecting San Francisco and Los Angeles with a high-speed

Mester Supports Ending Fed
Mester Supports Ending Fed's Balance-Sheet Unwind This Year

"There'd be a trade-off between announcing early and tapering off," Mester told reporters following a speech in Newark, Delaware, on Tuesday. Mester said she preferred the Fed revert to a balance sheet made up primarily of Treasuries, adding that "I would skew it towards short-term Treasuries," though

Trump Receives Report on U.S. Security Threat of Car Imports
Trump Receives Report on U.S. Security Threat of Car Imports

Commerce Secretary Wilbur Ross has submitted his recommendations to Trump, the department said in a statement on Sunday in Washington, without offering any insights into the findings. Trump has 90 days to decide whether to act on the findings. Trump has threatened levies of as much as 25 percent on foreign-made vehicles.

Trump Is Starting to Get Under Merkel
Trump Is Starting to Get Under Merkel's Skin

Angela Merkel is sick of Donald Trump's constant bashing of Germany. The German chancellor delivered one of the most impassioned speeches of her career, defending the multilateral order before an audience of western leaders and security officials in Munich this weekend. One reason Merkel was so fired up was a U.S. push to drive a wedge between Germany and its European partners.

Bill Gates Says Taxing Capital Gains Is the Best Way to Tap
Bill Gates Says Taxing Capital Gains Is the Best Way to Tap 'Big Fortunes'

"We only collect about 20 percent of GDP and we spend like 24 percent of GDP. Proposals have circulated recently for the richest Americans to again face a top marginal tax rate of 70 percent, as they did during much of the 1970s before it was lowered by President Ronald Reagan, and for other wealth-focused measures to be taken to address rising income inequality in the U.S. "If you go about doing this additional collection, of course you want to be progressive, you want the portion that comes from the top 1 percent or top 20 percent to be much higher," he said.

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

Comments

Top News: Economy

facebook
Hit "Like"
Don't miss any important news
Thanks, you don't need to show me this anymore.