Building Your Dreams One Car At A Time With BYD America VP Micheal Austin

Today's guest on Zing Talk is Vice President of BYD America, Micheal Austin.

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Warren Buffett doesn't typically invest in new technology companies.

Michael Austin: Especially not Asian – he's never invested in an Asian technology company before.

Exactly. So what did he see in BYD, and did you actually meet with him face-to-face?

Michael Austin: I met with him and Charlie [Munger]. I didn't do any of the negotiations for the share procurements. I met with David Sokol, who is the chairman of MidAmerican Energy Holdings Company. Great guy. Fantastic, in fact. I would say he's every bit as much Warren.

Do you think he's the successor?

Michael Austin: I don't need to say that; it's been published that he's a likely candidate. But they're talking about splitting up Warren's duties anyway.

And you know, only Warren and Charlie – Charlie seems to know more about his successor than Warren knows. [Laughs] It's true! You should ask him.

I would tell you, it is that BYD wasn't like a Detroit auto company. We weren't. We weren't coming out of the same tub. We weren't coming to compete with Kia or Hyundei. We weren't coming here to compete on price. We had something completely different. Even our vision was not about making EVs and flooding the market with EVs. It wasn't even that vision.

It was this holistic, you know what, let's put solar panels on the roof of every home. And let's put solar-shaded parking. And let's charge batteries all day long. And when they come home at night, they're discharging, DC to DC, and creating this zero emission solution, and not just a transference of the problem. So I think he was really, really keen on – even though he didn't understand the technology, he caught the vision of, this company is thinking, and it's a Chinese company that's thinking about the environment, and it's thinking about how to change China.

And certainly Warren said, “I need that in the U.S.” BYD wasn't convinced that he needed it in the U.S. In fact, it was Warren – Warren pushed them a lot. Because the truth is, the market is in China. The market is in India next. It's never going to be in the U.S. We're going to sell, what, 10 to 15 million vehicles here. They sold 15 million in China alone! They passed the U.S. market two years ago.

They sold how many in China?

Michael Austin: The whole market was 15 million. The U.S. market was 11 here, right? The year before it was 13 in China and 9 in the U.S.

So China passed them, and will continue to pass them.

Michael Austin: And you gotta look at it. What's the penetration for vehicle usage in the United States? Ninety-eight percent. What's the penetration in China? Six.

I was gonna say four.

Michael Austin: It's six! Six percent. And that's what 1.6 billion people. The middle class has reached 30% – 30% wants a car. They don't have a dream of owning a home. Their dream is mobile. Their dream is getting a car so they can be mobile. And they'll do one car per family, that's still the goal. But one car per middle-class family is still 320 million cars yet to be sold. It would take me 80 years to sell 320 million cars in the U.S. and Europe put together. So China's the market.

Warren, coming in there, gave your company a brand of…a stamp of approval.

Michael Austin: Well, it was definitely a vote of these guys got a vision that I want to support. I want to see this vision go forward. He supported it and he took a risk, and his risk paid off big initially, and he's sticking with it. He's certainly made a good choice, and I appreciate his choice very much.

When was this company founded?

Michael Austin: In 1995.

Was it originally named BYD, Build Your Dreams?

Michael Austin: No. It was named BYD.

And you guys added Build Your Dreams to translate it to the U.S.?

Michael Austin: BYD was a company that actually sounded like another major brand in China. So it was leveraging another company. It never had a motto until the auto became a brand. The issue was, before that, we were private labeling under Nokia NOK, Motorola MMI, Apple AAPL. We didn't need a brand. Who cares, ya know?

When we went and launched the cars we wanted it to mean something. The good news is that it actually means something – to build your dreams, right? And it's those dreams are environmental recovery and economic recovery. I don't think a lot of people catch that.

It's really, almost, the economic recovery has to happen first. No one gives a crap about the environment if you have no money. You're certainly not worrying about the environment if you've got people starving to death. In China, that's the issue – economic recovery, and then environment recovery. And if you can do it at the same time with the same technology, it's a win for everybody. And that's what the Three Green Dreams are about. It's pushing those technologies.

In Tibet, they're giving away 1,000 of these home energy systems. These are nomadic tribes, they don't even have a home. They just travel. They got a solar panel they track with them. They got an energy storing battery. They have televisions and blenders they plug in. They're more environmentally friendly than half the United States citizens. And this is Tibet! So China is getting leap-years ahead of us.

Do you guys ever see a NYSE offering…?

Michael Austin: It is being traded on the ADR… And I don't understand the market very well. I know it launched in Hong Kong. It hasn't taken any government investments.

I tweeted that I was going to speak to BYD's vice president, and five replies think I'm talking about Boyd Gaming Corporation BYD. That's the stock symbol, BYD.

Michael Austin: I know! Which is confusing. We didn't know that would occur when we launched in the Hong Kong market.

Regarding BYD's presentation at the North American International Auto Show, another journalist asked: This was a very intense presentation. It was the most intense thing I've seen all day long. Especially the opening video, it was very gripping. Do you think Detroit's ready to hear this message?

Michael Austin: I think Detroit has the willpower. Detroit certainly has the manpower. They have the resources. They don't need new leadership, they just need brave leadership. And it takes some guts to say, “I'm gonna go first in the market,” like GM GM did with the EV1. You know? And it takes some guts to say, “I'm gonna crush all those EV1s.”

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Posted In: Movers & ShakersGeneralBenzinga PodcastBYDBYD AmericaMicheal Austin
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