Buffett goes electric with Chinese car firm investment

Billionaire philanthropist and investor Warren Buffett has announced he is to continue his push into the cleantech space with the acquisition of a 10 per cent stake in China-based battery and electric car manufacturer BYD.

Investment company MidAmerican Energy Holdings, which is 87 per cent owned by Buffett's Berkshire Hathaway group, said it will pay $230m for 225 million shares in BYD, sending shares of Hong Kong-listed BYD soaring.

MidAmerican said the deal would extend beyond a simple investment opportunity and would be backed up by a collaborative partnership designed to help bring BYD's technology to a wider global market.

BYD said it was aiming to start selling its gasoline-electric hybrid cars in China in November, with electric cars to be launched in mainland China from next June and in overseas markets from 2011.

BYD's electric cars will be based on lithium-ion battery technology and the company has said that they will be able to travel up to 300 kilometres on a single charge. It also claims that a full charge will require nine hours, but that the batteries could be charged to 80 per cent capacity in 15 minutes.

BYD shares closed 40 per cent up on the Hong Kong stock exchange on the day of the news.

The deal is Buffett's first investment in China after Berkshire Hathaway last year sold its stake in PetroChina.

However, it represents his second investment in low carbon technologies in as many weeks, following his recent $5.7bn deal to acquire US nuclear operator Constellation Energy Group.

The deal is expected to give Berkshire Hathaway control of five nuclear power plants in the US providing 3.7 per cent of the country's nuclear energy capacity.