28 October 2016
More new players like China Dynamics could emerge to challenge BYD in the e-bus market in the not-so-distant future. Photo: internet
More new players like China Dynamics could emerge to challenge BYD in the e-bus market in the not-so-distant future. Photo: internet

BYD is not alone in the e-bus world

Media-savvy carmaker BYD Co. Ltd. (01211.HK) makes sure the world knows about the latest e-bus order it has secured or the recognition its models have earned.

The e6 electric car BYD showcased at the Havana International Fair in Cuba, for instance, won the gold medal for best quality product, a news release from the firm said Thursday.

In its company report, BYD detailed how its e-buses and e-taxis have accumulated the highest mileage record globally and that it has extended its market coverage to 10 cities in the mainland.

Outside China, more than 36 countries and regions around the world are either test-running its electric vehicles (EVs) or have already placed orders.

An order in April for 60 e-buses from Long Beach Transit in California was a landmark deal for BYD in the United States.

BYD indeed has a head start on other firms.

Not many companies are making commercial EVs.

Big European brands like Man SE have not been active in this segment.

It is believed that their heavy investments in reducing emissions of their diesel engines have yet to be recouped, and that is why they are not keen about splashing out on new projects like EVs.

But BYD is not alone in spotting the void.

China Dynamics Holdings Ltd. (00476.HK) said this week it has signed a sales contract with the Xingtai municipal government in Hebei for 100 e-buses to be delivered by the end of this year.

Partnering with the Hong Kong Productivity Council, its subsidiary Green Dynamics launched last month an e-bus that packs advanced technology like a permanent magnet synchronized motor system and smart control units that help maximize its energy efficiency and mileage.

Designed to run in Hong Kong’s challenging conditions with a scorching summer (air conditioning can consume up to 30 percent of the power of a bus), twisting roads and lots of traffic lights and frequent stops on bus routes, the e-bus China Dynamics can offer could make it a strong rival to BYD.

Being regarded as the only major EV maker in China is probably the biggest reason why the not-so-profitable BYD trades at a price-earnings ratio of more than 100 times and is one of the Chinese carmakers with the highest valuations.

But if the sales momentum of China Dynamics begins to pick up, or when more serious players get into the race, the market might have to reassess if the fat first-mover premium in BYD’s stock still makes sense.

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EJ Insight writer

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