From Free Phones to Free Taxis, BYD and China Development Bank Offer Break-Through Financing on Electrified Public Transportation

BEIJING--()--You may have missed it; a break-through announcement on November 4th out of Beijing China – yes, the very manufacturer that made it possible for global cell phone carriers to offer FREE mobile phones with a service contract (commoditizing the cell phone industry). BYD has now launched a program that essentially makes electric taxis and buses FREE in China – Yes, free in the same way cell phones are free. BYD and China Development Bank will facilitate the rapid adoption of electric vehicles by Chinese municipalities with the introduction of their “Zero Down, Zero Effective Cost, Zero Emissions” program aimed at the Chinese taxi and bus market. They have challenged fleet managers to re-look at monthly operational savings as a way to reduce and spread out the price difference of up-front costs associated with new electric vehicle purchases across several years. The financial project administrated by the China Development Bank and others now total over 30 Billion RMB (~$4.6B USD) in credit and will allow buyers to finance 100% of the purchase price with no money down, paying a lease rate that effectively costs LESS than regular monthly operational expenses (see the accompanying charts). This chart displays the “effective cost” when driving the BYD 5-passenger, e6 Taxi. If the vehicle is driven enough, the vehicle payment will be entirely offset; making the effective cost of the lease Zero (now driving EVs are not only environmentally friendly with zero direct emissions, but the savings are greater than the monthly payment)!

“Zero Down, Zero Effective Cost, Zero Emissions”

                      BYD e6 MONTHLY PAYMENT        

$550

   
    EFFECTIVE PAYMENT CHART*

 

Miles DAYS DRIVEN    

NOTE: Bold numbers are savings beyond payment (car is free)

per Day 1       7       14       21       25       28       29       30       31  
1 ($550 ) ($549 ) ($549 ) ($548 )     ($548 ) ($548 ) ($548 )     ($547 ) ($547 )
31 ($546 ) ($520 ) ($491 ) ($461 ) ($445 ) ($432 ) ($428 ) ($423 ) ($419 )
63 ($542 ) ($491 ) ($432 ) ($373 ) ($339 ) ($314 ) ($305 ) ($297 ) ($288 )
94 ($537 ) ($461 ) ($373 ) ($284 ) ($234 ) ($196 ) ($183 ) ($170 ) ($158 )
125 ($533 ) ($432 ) ($314 ) ($196 ) ($128 ) ($78 ) ($61 ) ($44 ) ($27 )
156 ($529 ) ($402 ) ($255 ) ($107 ) ($23 ) $41 $62 $83 $104
188 ($525 ) ($373 ) ($196 ) ($18 ) $83 $159 $184 $209 $235
219 ($520 ) ($343 ) ($137 ) $70 $188 $277 $306 $336 $365
250 ($516 ) ($314 ) ($78 ) $159 $294 $395 $429 $462 $496
281 ($512 ) ($284 ) ($18 ) $247 $399 $513 $551 $589 $627
* EV savings delta assumes $.10/KWh electricity, $4.50/gallon
 

China’s concerns about economic recovery coupled with environmental pollution, and rapidly rising fuel costs have led to a social consensus about the national imperative to develop electrified transportation platforms. China’s public fleets now have over 500,000 bus rapid transits and over 1.2 million taxis which may only constitute 1.7% of the total number of motor vehicles, HOWEVER, they constitute 27% of fuel consumption and total vehicle emissions! There is an urgent need for cleaner public transportation solutions; however, the initial costs of purchasing clean-energy vehicles have long been cost prohibitive. As a leader in new clean energy vehicles, BYD has successfully launched commercial operations of scale in locations such as Shenzhen, Xi'an, Baoji, Shaoguan, the Netherlands, Singapore, the United States, Columbia, Denmark, Germany and London in the U.K. A fleet of 300± BYD e6 pure electric taxis have been operating in Shenzhen for two years and have logged over 26 million kilometres (~16 million miles). Miles logged by a single taxi is approaching 240,000 kilometres (~149,000 miles), equivalent to more than 10 years of service mileage for a normal private-party car. Similarly, the 200 pure electric BYD eBuses operating in Shenzhen have an accumulated mileage of over 10.5 million kilometres (~6.5 million miles). Augmenting this solid fleet experience, BYD has now announced cooperation with several local enterprises in Tianjin and Yunnan as well as other cities globally to manufacture and promote electric public transportation and to speed EV adoption and acceptance. The “Zero Down, Zero Effective Cost, Zero Emissions” initiative removes the financial barriers, speeding the electrification of public transportation fleets.

Zero Down” literally means that customers will not need to pay the purchase price of the vehicle or a down payment at time of vehicle delivery – customers only pay the monthly instalments. Because the price of electricity is so much lower than that of petroleum, the cost savings from monthly taxi usage far outweigh the electric vehicle monthly fees. In Shenzhen for example, the BYD e6 taxi (after subtracting the 60,000 RMB or ~$9300 USD government subsidy and 60,000 RMB ~$9300 USD local subsidy) costs about 180,000 RMB (~$28,000 USD). A Shenzhen taxi travels an average of 450 Km per day (~280 miles) and operates 353 days a year (taxis average one day downtime per month due to service). It is estimated that the average fuel a taxi consumes is about 9 litres of petrol per 100km (~26 mpg), and the price of petrol is 8 RMB per litre (~$4.50/gal). The e6 pure electric taxi consumes 26 KWh per 100km (EPA: 3.8 KWh/ mile or 88.5 mpge), and the average price of electricity is 0.66 RMB (~ $0.10/ KWh); so each electric taxi saves 247 RMB (~$38 USD) per day, or 7166 RMB (~$1103 USD) per month….BUT the BYD e6 5-year-lease rate in Shenzhen is only 3576 RMB (~$550 USD) per month! Customers are cash-flow positive (with 3590 RMB extra in the bank) from the first month they lease a car with “Zero Effective Cost”! If the taxi runs for 5 years, the total savings is 326,400 RMB (~$50,215 USD) – this is pure profit.

              Project     Gasoline Taxi     BYD e6 Electric Taxi     ROI compared to Gas
Operating Expense     563,760 RMB     133,803 RMB     429,957 RMB
over 5 years     ($86,732 USD)     ($20,585 USD)     ($66,147 USD)
Price of Vehicle 100,000 RMB 180,000 RMB -80,000 RMB
    ($15,385 USD)     ($27,692 USD) after subsidy     (-$12,308 USD)
Purchase Tax 8,547 RMB 15,385 RMB -6,838 RMB
    ($1315 USD)     ($2367 USD)     (-$1052 USD)
Interest Incurred 0 16,673 RMB -16,673 RMB
        ($2565 USD)     (-$2565 USD)
Savings in 5 years                 326,447 RMB (~$50K)
 

This green vehicle initiative not only provides significant operational savings and economic recovery for public transport and taxi companies, but also brings a substantial social value. The “Zero emissions” and zero direct city pollution can be very significant. An e6 electric taxi saves 14,120 litres (~3816 gal) of fuel per year, with 32 tonnes fewer CO2 emissions even when offsetting the 80% Chinese coal-electric generation contribution. If 1.2 million taxis in China were all replaced by pure electric vehicles, in one year, 169 million litres (45 million gal) of fuel could be saved, and CO2 emissions could be reduced by 38.62 million tonnes! This number only goes up as China transitions more and more to green electric generation sources (with Hydro, Geo, Wind and Solar generation). To support the scaling up of electric vehicle use, BYD will partner with electricity grid companies to develop the needed infrastructure, distributed-smart energy storage and provide planning and technical support for the development of charging stations. Analysts are now saying: “pure electric vehicles as the mainstay of public transportation are finally coming to fruition in China. With this new break-through financing which clearly demonstrates the substantial economic value and social benefits, new energy vehicles can achieve mass-adoption in a relatively short period of time.” Readers should take note: In 2000, when US carriers began offering the first “free-phone” offers, cell-phone penetration in the US was only 10%. In only seven (7) years time, with lower-competitive, cell-phone prices (thank you BYD) and this wide-spread new financing model for “free phones” in place, penetration raced to 98%! History is about to repeat itself!

About BYD

BYD is ranked #1 at the top of Bloomberg’s and Business Week's 2009 Tech 100 List (http://www.businesswire.com/news/home/20100520006751/en/BYD-Tops-Bloomberg-Businessweek%E2%80%99s-12th-Annual-Tech ) and is the leading manufacturer of advanced, environmentally-friendly battery technologies like the BYD’s Iron Phosphate battery used in BYD electric vehicles and electric buses. BYD’s solar panels and LED Lighting systems have CEC, TUV/CE and UL listings, and the company enjoys rapid growth in consumer electronics space and electrified transportation sector manufacturing under its BYD brand. BYD is the fastest-growing Chinese automotive and green energy technology enterprise. The Company trades on the Hong Kong Exchange (HKE) under the ticker numbers (HK.0285 – BYD Electronics) and (HK.1211 – BYD Company Ltd.), as well as on the Shenzhen Stock Exchange under the ticker number (002594 - BYD Company Ltd.). For more information, visit www.byd.com, www.facebook.com/bydcompany or email pr@byd.com

Contacts

BYD
EU or Asia Contact:
Sherry Li
tel: +86-755-8988 8888
sherry.li@byd.com
or
US Contact:
Micheal Austin
+1-800-BYD-AUTO
micheal.austin@byd.com

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