Automaker continues to push for the development of its green vehicle despite initial bumps

BYD has provided 50 e6 electric cars to taxi operators in Shenzhen, Guangdong province, as part of a trial run. [A Hui / For China Daily]

BYD's worst nightmare came true last year.

BYD, which stands for Build Your Dream, is known as the pioneer of electric vehicles in China. The company had high expectations for the F3DM and had hoped to sell up to 1,000 units.

Even combined with an incentive backed by the central government, the company sold fewer than 500 electric cars in 2010. The F3DM can switch between hybrid electric and electric modes, and can be charged at home using a 220v outlet.

The sales numbers are certainly far from impressive, especially when compared to its counterparts. Chevy Volt and Nissan Leaf, the two mass-produced electric cars in the world, sold 493 units and 573 units, respectively, in North America in April alone.

BYD started as a cell phone battery manufacturer in 1995 and became the second-largest supplier in the world in 2003. In the same year, BYD acquired a domestic auto company, and edged into the top three homegrown auto brands in China in five years.

BYD says it is a company with multiple businesses: IT, conventional cars and electric cars. The company proudly claims that one out of every three cell phone batteries in the world is made by BYD.

But in 2008, it broke into the electronic vehicle field. That year, when the world just began to feel the chill of the financial crisis, Warren Buffett invested $230 million (158 million euros) to buy 10 percent of the company's shares, making it an overnight superstar. Since then, the company's development of electric vehicles has attracted auto experts' attention from all over the world.

BYD argues that the small sales numbers are a result of a limited production capacity. The company produced only 50 units of the e6, and sent all of them to a taxi company in Shenzhen for pilot operation. This model is not yet available to consumers. The production capacity of F3DM, which is priced at 168,000 yuan (18,048 euros), is only 400 a year.

The price may be another reason why consumers aren't charged up to purchase the F3DM model. BYD's most popular conventional models are priced between 50,000 yuan and 100,000 yuan.

Song Jian, executive vice-president of Tsinghua Automotive Engineering Institute, says BYD's struggle is a reflection of the whole electric vehicle industry in China. Although automakers are enthusiastic in pushing forward with electric vehicles, the lack of infrastructure and the public's confidence in safety and performance hold consumers back.

"Without a real market, automakers dare not bet all their resources on (electric vehicle) development, which further restricts the quality improvement. This just forms a vicious circle in the industry," Song says.

"If an electric car is expensive, not reliable and not safe, who is going to buy it?"

The central government picked six cities - Shanghai, Hangzhou, Shenzhen, Hefei, Changchun and Beijing - as pilot cities to promote electric cars. These cities are aggressively laying out the necessary infrastructure, including charging stations.

Shenzhen in South China's Guangdong province, where BYD's headquarters is located, four charging stations were built and 180 charging pillars were installed by the end of November 2010. But this wasn't the tipping point for many consumers.

BYD is proud of the progress it has made in the development of electric vehicles. Xia Zhibing, general manager of BYD, says he is very glad to see that the battery in the car is strong enough to stand the pilot program in Shenzhen.

"BYD is the first in the world to launch a big-scale electric car pilot operation. And, on average, a car runs 90,000 km, the equivalent of a (gas-powered) car running for 6 years," Xia says, adding that BYD will make some adjustments at the pilot program based on drivers' comments.

BYD has also formed a joint venture company with Mercedes-Benz to develop electric cars. The new company has finished the design of its first electric car and is ready to test it.