Deutsche Bank Downgrades BYD – Claims Chinese Don’t Want Electric Cars

JAN 31 2015 BY ERIC LOVEDAY 33

BYD Qin Sales Have Steadily Grown In China (data through October 2014)

BYD Qin Sales Have Steadily Grown In China (data through October 2014)

BYD Electric Bus Sales Have Soared For Most All Of 2014

BYD Electric Bus Sales Have Soared For Most All Of 2014

According to Deutsche Bank, the Chinese do not buy electric cars. Well, that’s flat out false (as EVs are practically mandated to be purchased in some larger cities), but that hasn’t stopped Deutsche Bank from releasing a negative note aimed at BYD.

As Barron’s reports:

“In a research note out this morning, the bank sharply cut its price target for Warren Buffett backed electric car maker BYD (1211.HK) by 28% from 48.50 Hong Kong dollars to HK$34.90 a share.”

Deutsche Bank analyst Vincent Ha wrote:

“The slow adoption of NEVs is due to the lack of support from individual car owners. In our proprietary car owner survey carried out in October 2014 (included in our sector report dated 18 November), findings indicated that 53% of the car owners who plan to replace their cars in 1-2 years will not consider NEVs mainly with the concern on charging infrastructure availability. Therefore, NEV sales can only be predominantly supported by government and public transportation demand. Apart from that, we also think the competition in the EV segment will gradually heat up with introduction of more EVs by various auto manufacturers, including JVs.”

We take issue with the analyst’s focus on NEVs (neighborhood electric vehicles), which is not the type of electric car that BYD sells and the fact that the analyst fails to mention that BYD’s plug-in electric car sales (and pure electric buses) have been soaring as of late.   In addition BYD is in the business of selling electrified buses, and that business is also very strong, with over 2,600 bus orders currently in the pipeline waiting to be built out..  Clearly, this analyst has no clue in regards to what’s going on at BYD in the electric vehicle space.

Source: Barron’s

Categories: BYD

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33 Comments on "Deutsche Bank Downgrades BYD – Claims Chinese Don’t Want Electric Cars"

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NEV = New energy vehicle = Electric cars, hybrids, biogas/natural gas cars, fuel cell cars.

So NEVs are exactly what BYD are doing, even though they first and foremost sell ICE cars.

Deutsche bank = Douche bag = Tesla spokes person.

=See Through

You are so anti tesla biased that you don’t see “ze german” traditional ICE car selling in China beeing protected by this particular Deutsche Bank statement – they dont care as much about tesla as you do (…in a negative way) – which is funny

Um, no. NEV = Neighborhood Electric Vehicle. That describes the sort of low-speed EV that you can’t legally drive on the highway, or on any road with a speed limit higher than (in the USA, depending on the State) 25-40 MPH. In other words, NEV = glorified golf cart. BYD’s Qin aside, NEVs indeed comprise the largest segment of China’s electric car market. The e-bike market is even larger; China, for all its recent strides towards being an economic superpower, is still largely a third-world country. That said, China is now GM’s largest market. So yes, there is a huge potential market there for compelling EVs, once China solves its problem with a lack of EV charge points– both public and private. Recent articles on Tesla’s attempts to penetrate the China market have made it very clear that, despite the Chinese central government’s efforts to promote adoption of EVs, the provincial, municipal, and local governments are not exactly falling all over themselves to provide the electrical hookups necessary to charge a plug-in EV. There’s no question that eventually, China will be a huge market for PEVs. Really, they have no choice — they -must- address the huge and growing problem… Read more »

I’ll keep that in mind the next time I read an article written in Chinese.

The term NEV has been used in article related to EVs for some time now, and it most certainly does mean “Neighborhood Electric Vehicle” and nothing else.

Another term for the same thing is “Low Speed Electric Vehicle.” To alleviate your apparent confusion on this point, here’s a relevant InsideEVs article on that subject:

“Low-Speed Electric Vehicles Becoming Increasingly Popular in China”

http://insideevs.com/low-speed-electric-vehicles-becoming-increasingly-popular-in-china/

And just in case you can’t be bothered to read the article, here’s a quote:

“Though China may not yet embrace the /real/ electric automobile, the low-speed variety is really catching on.”

As I said: NEVs indeed comprise the largest segment of China’s electric car market.

The only place “NEV” would be considered a low speed EV is in the US. Anywhere else the NEV term is used based on the Chinese market.

So get over yourself. And if you want to refer to low speed EV’s that you can just write low speed EV’s.

Well, try Googling or and tell me how often you see it defined as “New Energy Vehicle”. I find no hits at all that way. None, nada, zip, zilch. And quite a few hits defining it as “Neighborhood Electric Vehicle”.

As they say: You’re entitled to your own opinion, but not your own facts.

You can deny reality all you like, but the term -does- mean Neighborhood Electric Vehicle.

Hmmm, apparently the InsideEVs comments software swallows anything inside less-than and greater-than brackets. 2nd try:

Well, try Googling (BEV acronym) or (BEV definition) and tell me how often you see it defined as “New Energy Vehicle”. I find no hits at all that way. None, nada, zip, zilch. And quite a few hits defining it as “Neighborhood Electric Vehicle”.

HaHa … yet Chinese are purchasing 10-14,000 PEVs per month of the ~18 million sold annually. Monthly sales volume had increased 6x on YOY basis in 2014, moving China to the largest EV market in the world.

Very odd the main concern centers around “car owners who plan to replace their cars in 1-2 years” when over half of car buyers in China are first time buyers.
http://www.forbes.com/sites/jackperkowski/2014/12/12/electric-cars-a-review-of-2014/

Think there is some speculation going on re: BYD. Wonder if Warren Buffet will take to twitter like Elon Muck does when analysts get overly speculative with the stock? 😉

FYI: NEV: represents New-technology Electric Vehicles
(not Neighborhood EVs) … NEV is Chinese equivalent of PEV (US).

No… NEV isn’t new technology electric vehicles. It’s new energy vehicles.

And the definition includes all alternative fuel variants like hydrogen, natural gas, traditional hybrids, fuel cells etc. not only plug-ins.

I don’t think traditional hybrids are part of that. That (cleverly) keeps Toyota Prius out of the incentives.

Surprisingly, NEV does include traditional hybrids. I posted this link above and it defines New Energy Vehicles as follows:

Definition of New Energy Vehicles

A New Energy Vehicle (NEV) is defined as a vehicle which uses alternative fuel technologies and electrification technologies. It refers to vehicles using unconventional vehicle fuels as a power source, or vehicles using conventional fuels with new automotive propulsion systems, advanced integrated vehicle dynamics control and driving technologies.

• Hybrid Engine Vehicle (HEV)
• Battery Electric Vehicles (BEVs)
• Plug-in Hybrid Electric Vehicle (PHEVs)
• Fuel-cell Electric Vehicles
• Hydrogen Engine Vehicles
• Natural Gas Vehicles
• Other possible variants

The fact that somebody who wasn’t aware that the term “NEV” was already in use in the EV field does -not- mean he gets to redefine the term to suit himself.

You can, like Humpty Dumpty, insist that any word or term means anything you like. But if you actually want people to -understand- what you write, then stick to terms that most people agree on.

“…then stick to terms that most people agree on.”

Hmmm, NEV(neighborhood electric vehicle) is a USA term, population:316 million
NEV(new energy vehicle) is a China term, population:1.35 billion

Seems like “new energy vehicle” is the term used by “most people”.

Just because a term is already in use doesn’t mean that people won’t redefine it. It happens all the time. “Gay” used to mean something completely different than it does now.

Things change. China probably didn’t even know the term “NEV”, which is more likely an english translation anyway.

Fighting over the meaning of NEV shouldn’t be this heated.

Jesse Gurr said:

“Seems like ‘new energy vehicle’ is the term used by ‘most people’.”

No, just you.

If you don’t believe me, Google (NEV acronym) or (NEV definition). Good luck finding any place on the Internet that defines it as “New Energy Vehicle”, because that’s not what it means.

“No, just you.”

Tell that to the China Daily and all major Chinese media outlets. The Chinese government came up with the term New Energy Vehicle.

http://www.chinadaily.com.cn/china/2014-09/07/content_18560188.htm

Things change. NEV used be the old postal abbreviation for Nevada.

NEV (US Neighbor Electric Vehicle) are restricted from use on state and federal roadways (local streets, or non-public roads only), most models built in very limited production.

NEV (China New Energy Vehicle) are fully licensed and registered vehicles built at full-scale production and meet all standard crash and safety requirements.

Mikael said:

“No… NEV isn’t new technology electric vehicles. It’s new energy vehicles.

And the definition includes all alternative fuel variants like hydrogen, natural gas, traditional hybrids, fuel cells etc. not only plug-ins.”

*Sigh*

Let’s look at the actual quote, from the Deutsche Bank rep, in the article under discussion:

“…53% of the car owners who plan to replace their cars in 1-2 years will not consider NEVs mainly with the concern on charging infrastructure availability.”

So you’re insisting, Mikael, that what he’s really saying is that everybody considering any sort of alternative fuel car, including hydrogen and natural gas, will be concerned with “charging”.

Last time I looked, you didn’t need to -charge- a fuel cell or natural gas powered car. You refuel them.

Personally, altho I generally have a low opinion of “analysts” making statements about the future performance of companies making plug-in EVs, I think he does at least know what “NEV” actually means: “Neighborhood Electric Vehicle”.

Most people looking at NEVs are looking at plugin vehicles of some kind. Gas and fuel cell cars are not the main option or interest.
So of course the main concern when considering a NEV will be where to charge it. So even for BYD who sells NEVs in the form of the BYD Qin and Tang and the E6 that will be a problem.

Yes, “New Energy Vehicle” is correct term.

“53% will not consider a NEV…” – That leaves 47% that will consider an NEV. It would be nice to have that sort of percentage here in the US or anywhere else for that matter.

+1

I fail to see this as bad news for BYD, or any other EV seller. Even if “only” 47% are willing to consider an EV, that’s a huge number compared to the existing EV market.

Heck, even if only 10% are willing to consider an EV in the next one to two years, it’s still a huge market, far bigger than the number of EVs that will actually be sold in the period.

The proper question isn’t how many people are willing to consider EVs. The question is how many of the ones who are will 1) Be able to afford one, and 2) Be able to charge one where they usually park.

Chinese cities have the same problem as US cities lack of charging infrastructure, and Chinese apartment dwellers have to go up against a worse bureaucracy than the coop boards, condo boards, and HOAs in the US. In Beijing, the difficulty to charge an EV resulted in a whopping 70% of the people who won a special lottery for an electric vehicle license failed to buy an EV before their rights expired. These people have virtually no chance of getting an ICE vehicle license, yet after winning the EV license lottery they determined that charging an EV would be to difficult and opted instead not buy an EV and let their right to an EV license expire. http://www.chinadaily.com.cn/business/motoring/2014-11/03/content_18858020.htm Here is an article about the difficulty of charging in China from a retired Volkswagon executive who lived in China for nearly 10 years. The link to the article is in this link to a InsideEVs comment. http://insideevs.com/tesla-assist-chinese-model-s-buyers-trading-used-cars/#comment-626718 InsideEV’s spam filter blocks the URL for DailyKanban for some reason. Oddly, when I posted a link from this website with a “dot” instead of a “.” it got past the spam filter, but was soon manually deleted by someone at InsideEVs even though it… Read more »

Is it time to buy BYD shares? 😉

My thought too. If Warren is backing them…

OPINION/

This is the Chinese reality – Smog from emissions.

This was my Twitter responce in support of Mr. Lovedays’ strong rebuttal to Deutsche Banks’ Burkshire Hathway-(Warren Buffett) BYD, clueless/hostile, “negative note.”

https://twitter.com/InsideEVs/status/561660345211568128

Understandable is Mr. Lovedays’ commentary, as he was the first to report on BYDs’ superior global market ramp up in Urban Electric Fueled Busses in his December 1st report-

Link Goes To Inside EVs – BYD Electric Fueled Bus Report,”BYD Electric Bus Sales – 4,000 Per Year In China” – December 31st 2014-

http://insideevs.com/byd-electric-bus-sales-4000-per-year-china/

Best-

Thomas J. Thias

517-749-0532

https://twitter.com/AmazingChevVolt

When stock exchange insiders publish reports on particular stocks; it’s very easy for them to create a false tale to churn the market in the direction they want it to move for whatever reason. There is always a question of trust.

As the bankers told Henry Ford 120 years ago.
“Get a Horse”

Aren’t the banks in bed with Big Oil anyway? Why am I not surprised at this nonsense.

I ordered my Qin 2 months ago, and need 3 more months to get it, I’m in China.
I’m considering changing the order to BYD Tang SUV