China's BYD takes aim at Tesla in battery factory race
By Nichola Groom
LOS ANGELES (Reuters) - Chinese automaker BYD (1211.HK: Quote) Co Ltd (002594.SZ: Quote), backed by Warren Buffett's Berkshire Hathaway Inc (BRKa.N: Quote), aims to triple its production of batteries as it takes on Tesla Motors (TSLA.O: Quote) in the race to supply electric vehicles and boost energy storage.
Shenzhen-based BYD plans to add 6 gigawatt hours of global production for batteries in each of the next three years, and hopes to keep adding at that pace afterwards if demand is solid, Matthew Jurjevich, a spokesman for the company, said on Friday.
That means BYD could ramp up from 10 GWh capacity at the end of this year to about 34 GWh of batteries by the beginning of 2020. This would put it about even with Tesla's planned $5 billion Nevada gigafactory.
The companies are fast emerging as two of the key players in the nascent electricity storage sector. Storage technology is considered critical to integrating large amounts of renewable energy because it can absorb excess power from wind farms or solar panels and keep that for use when conditions don't allow for power generation.
"We have demonstrated that BYD is capable of adding 6 GWh every year with strong market demand," Jurjevich, who works for BYD's U.S. unit, said in an interview.
The sector has attracted Tesla, BYD and a range of startups as well as stalwart battery manufacturers and is expected to grow to $1.5 billion by 2019 from $128 million in 2014 in the United States alone, according to GTM Research.
BYD, which declined to provide investment budgets, ended last year with 4 GWh of capacity and will be at 10 GWh later this year. The U.S. energy storage market is expected to triple this year to 220 MW, according to GTM.
Most of BYD's production is in China, but the company is opening a major new factory in Brazil this year that will contribute meaningfully to output next year, Jurjevich said. Continued...