BYD's new plant opens amid concerns

• Source: Global Times
• [08:27 August 21 2009]
• Comments

By Zhao Qian

BYD said its new battery production plant in Huizhou, Guangdong Province, was completed recently, but analysts warned yesterday that the company may face safety questions over its new batteries and the high production costs.

The battery maker turned automaker poured 5 billion yuan ($732 million) into the new battery production base that will manufacture rechargeable batteries, auto parts and mobile parts.
The iron battery, which is a type of ironic phosphate lithium cell, is supposed to be one of BYD’s most competitive products.

Analysts said that this type of battery would help makers of electric cars stay competitive although the road ahead remains challenging.

"Safety issues could remain for there is the potential risk of explosions with some kinds of batteries," said Li Chunbo, an auto analyst from CITICS Securities.

So large-scale tests are needed to ensure this kind of iron battery is safe, Li said.

BYD said in July its electric E6 cars would be produced for commercial use in late 2009 and will be equipped with the iron battery. The company said the new electric cell could lead to a drop in oil prices because of its low cost.

Li pointed out, however, that the cost of producing such batteries was still high.

"By now it is still hard to calculate the specific cost of producing the batteries because they have not been produced on a large scale," he said.

BYD is planning to work with other automakers to promote the growth of the electric auto industry, the National Business Daily reported Tuesday.

BYD officials could not be reached for comment.