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Warren Buffett-backed BYD in Australian electric car deal

Written by Simon Evans / Financial Review / 15 May 2019

Chinese electric car company BYD Co, in which Warren Buffett’s Berkshire Hathaway holds a stake of 25 per cent, has signed a deal with an Adelaide-based group to produce an electric car for the Australian market from late 2020.

BYD Co has signed a memorandum of understanding with EVANT to produce three different right-hand-drive passenger vehicles, including a mid-sized sports utility vehicle and a large SUV.

EVANT is backed by investment fund Fusion Capital and transport group Nexport.

Fusion is a large investor in Brabham Automotive, which is separately building the $1.8 million Brabham BT62 supercars in a northern Adelaide factory under the leadership of David Brabham. Mr Brabham’s father was the late three-time Formula One world champion Sir Jack Brabham, who was dominant in the sport in the early 1960s.

EVANT director Christian Reynolds, a former Tesla engineer who was an operations executive for the United States electric vehicle pioneer led by Elon Musk earlier in his career, said the eventual plan was to manufacture the vehicles in Adelaide.

But the initial production would happen in China, with those vehicles then brought to Adelaide for modifications and upgrades for the local market.

“We’ve been on this journey for three years,” Mr Reynolds said.

He said the new electric car would be sold under a new brand, which would be unveiled in the next couple of months. “It will be a new brand to the Australian market,” he said.

Mr Reynolds said it would be pitched at the premium end of the vehicle market because of the advanced technology and quality build and would have a range of up to 650 kilometres  between charges.

“We’re looking at the premium space.” But he emphasised the price tag would be ”dramatically below” the prices at which  Tesla models sold for in Australia.

The BYD Co and EVANT tie-up comes as British billionaire Sanjeev Guptaaims to become the first commercial electric vehicle manufacturer in Australia.

Mr Gupta, whose GFG Alliance has been working closely with the UK’s Gordon Murray Design for the past 18 months on its electric vehicle strategy, is in the final stages of deciding which prototype vehicles it will use to launch into the Australian marketplace.

Mr Gupta said on April 29 he aimed to have a production run of between 10,000 and 20,000 in Australia and was leaning toward a ”smart car” for metropolitan users.

Gordon Murray Design is based in Shalford near Surrey in the UK and specialises in low-volume production runs, utilising lightweight materials and technology used in Formula One cars. Mr Murray is a former McLaren Racing technical director.

One of Fusion Capital’s directors is Mat Fitch, owner of Precision Components, a big supplier of automotive components to Holden when it was a vehicle maker in Australia. Precision Components has been diversifying since car manufacturing ended in Australia after Ford, Holden and Toyota all shut their plants in 2016 and 2017.

BYD Co is listed on the Hong Kong Stock Exchange.

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