BYD recently launched an all-electric bus that uses a large solar energy system on top of the bus that works in conjunction with battery storage to give the bus a range of about 190 miles on a single charge. Undoubtedly some of LDK’s wafers will be used to make solar panels for these buses as well.
The solar panel manufacturing plant will cost BYD about $3.5 billion over five years, which the company can easily afford following a loan of about $2.3 billion from the Bank of China in December 2009. LDK scored an even bigger loan from the government, nearly $9 billion. Other Chinese solar makers, like Trina Solar Ltd. (NYSE: TSL), JA Solar Holding Co. Ltd. (NASDAQ: JASO), and Yingli Green Energy Holdings Co. Ltd. (NYSE: YGE), have also received loans totaling nearly $20 billion.
The Chinese government is very serious about the solar energy business. It wants not only to lead in manufacturing the cells and panels, but also in technology. The country is making a concerted effort to install solar and wind power plants to reduce its dependence on coal to fuel the country’s growth.
BYD expects to supply about 50% of China’s need for solar cells within the next several years. The company is already one of the country’s largest automakers and has made no secret of its desire to be the largest automaker in the world by 2025. LDK’s announcement of the deal has pushed the company’s shares up about 6% in early trading this morning.
Paul Ausick
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