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Amid a growing push for energy efficient vehicles, Fortune magazine has hit the stands this week with a cover showcasing magnate Warren Buffett and a much expected all-electric E6 car which will hit the Chinese market later this year from manufacturer BYD, a company in which Buffett has a considerable stake.
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The green cover shows the title "Buffett's Electric Car" adding "If the Oracle's plugging in, shouldn't you?" and exposes a story about the investment of Buffett's firm Berkshire Hathaway into BYD. The company is expected to compete with the world's largest automakers into the all-electric vehicle market.
Buffett's acquired a 10 percent stake in the firm last fall. The firm was founded in 1995, and is headed by Wang Chuan-Fu, a man described as a "combination of Thomas Edison and (former General Electric Chairman) Jack Welch- something like Edison in solving technical problems, and something like Welch in getting done what he needs to do," notes Buffet’s business partner Charlie Munger in the article by Fortune Magazine. It was Munger who first had the idea to invest in the firm.
BYD began with $300,000 that Wang raised from relatives as a manufacturer of rechargeable batteries. By 2000, the company became one of the world's largest producers of cell phone batteries, selling its product to Motorola, Nokia, Sony Ericsson and Samsung. In 2003, BYD acquired a Chinese state-owned car company and began to build cars. By making affordable electric cars, BYD has outpaced much larger rivals such as Toyota's Prius and Chevrolet's Chevy Volt.
Buffett first offered to purchase 25 percent of BYD but Wang rejected the offering which Buffett took as a "good sign."
"I don't know a thing about cell phones or batteries," Buffett admits, "And I don't know how cars work," but he points out: "Charlie Munger and Dave Sokol are smart guys, and they do understand it. And there's no question that what's been accomplished since 1995 at BYD is extraordinary," Fortune reports.
David Sokol is the chairman of Warren Buffet's MidAmerican Energy Holdings company, a subsidiary of Berkshire Hathaway.
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