Can VW turn BYD hybrid cars from dream to reality?

Coming much sooner to a dealer near you?

A couple of years ago a number of Chinese automakers started showing up at major auto shows. At the LA show, for instance, such Chinese vehicles usually found themselves in the basement - out of sight out of mind.

Nonetheless, I've been following some of these Chinese automakers, particularly BYD and its lithium battery business, ever since. Yet, it has been hard to take this automaker too seriously. Well, at least it was hard. Warren Buffett's recent stake in BYD certainly opened my mind.

Of course, BYD still doesn't have a history of quality car making, so BYD's big future still seems far into the future - which makes the news of a potential partnership between VW and BYD quite compelling. If BYD has hammered out the kinks of its hybrid vehicles, especially its lithium batteries, then VW could certainly help bring BYD's technology to market significantly faster than BYD could achieve on its own.

At this time VW and BYD are simply exploring options and possibilities, but the potential of this partnership seems like it could be a game changer.

Plugged in: Does Buffett prove BYD is golden?

What does the oracle of Omaha know about cars?

Not much, according to Warren Buffett, but Buffett partners, Charlie Munger and David Sokol, knew enough and Buffett listened. Thus, last fall Buffett settled on a 10 percent share of BYD.

Why?

According to a great Fortune piece, the Buffett team now believes that BYD could become the world's largest automaker thanks to its ability to sell plug-in hybrid cars and other electric vehicles at a cheaper cost than other manufacturers. For instance, BYD's current plug-in, the F3DM costs just $22,000 - far cheaper than most hybrid cars on the road today.

Unfortunately, don't expect a BYD hybrid in America anytime soon. BYD isn't sure it wants to come to America because the economics are not compelling for plug-in viability, however, BYD is interested in selling batteries to American auto manufacturers, which is ultimately, the key to BYD's future.

Thus far BYD believes it has developed a technological breakthrough enabling the safe and cost-effective mass-production of lithium batteries. If true, even mighty Toyota better watch out according to Warren Buffett.

Chinese plug-in hybrid on sale in 2008

To debut at 2008 Detroit Auto Show

Last year's North American International Auto Show was highlighted by the debut of GM's Chevy Volt plug-in hybrid concept.

A plug-in hybrid vehicle might also steal this year's show.

The BYD Automobile Company is a subsidiary of one of the largest cell-phone battery makers, and it plans to start selling the F6 plug-in hybrid sedan by the second half of 2008 according to Edmunds.

While this plug-in hybrid won't be as sophisticated as the Chevy Volt, it will hit the market sooner and will cost far less because it will utilize iron-based batteries, rather than lithium-ion batteries.

"The F6DM reportedly can be driven about 60 miles in electric mode and nearly 270 miles by using the gasoline engine as a generator to charge the battery pack. Top speed is 100 mph. BYD said the batteries can be recharged to 70 percent of capacity in just 10 minutes."

Already, Japan is kicking America's ass in NiMH-based hybrid vehicles. Is China gonna kick America's ass in the next of evolution of hybrid technology with its plug-in hybrid vehicles?