Faced with a history of slow plug-in vehicle sales in China, BYD has a new plan to move electric metal: free emission-free cars. Sort of.

Called "Zero vehicle purchase price, Zero costs, Zero emissions," BYD's new plan involves the company's all-electric e6 and its electric bus in China. Instead of paying the full price up-front, the companies can get financing from the China Development Bank to purchase vehicles using a "zero initial payment + payment in instalments" basis. BYD mentions three options – a financial lease, an operational lease and buyer's credit – but they all seem to be just different ways to look at saving money because monthly usage costs are lower in an EV than a gas-burning vehicle.

BYD cites the following example. The BYD e6 taxi costs 180,000 RMB ($28,820 US at today's exchange rates) after a 120,000 RMB ($19,000) off in federal and local subsidies. The math BYD uses says that monthly usage costs are 7,166 RMB ($1,147) lower in the e6 than a gas taxi every month. BYD says, "If the hire car runs for 5 years, and the total saving over 5 years is deducted from the higher cost of the vehicle and the interest on multiple payments, it can save 326,400 RMB." In other words, your EV is "free."

In case you were interested in reliability, BYD says there are over 300 e6 taxis in operation, and the longest-serving has almost 149,000 miles on it. BYD says the plan "provides a realistic and feasible path to speed up public transport electrification."
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BYD launches "Zero vehicle purchase price, Zero costs, Zero emissions" city electric public transport solution

Beijing, China – Nov 6 - On November 4th, BYD launched an city electric public transport solution: the 'Zero vehicle purchase price, Zero costs, Zero emissions' solution for the taxi and bus market. China Development Bank will provide financial support for the scheme. The scheme aims to ease the financial pressure on taxi and pay the full amount upfront for the purchase of electric vehicles. It provides a realistic and feasible path to speed up public transport electrification.

Difficult promotion prompts new models
The energy crisis, climate change and environmental pollution has led to a social consensus to develop electric vehicles. Considering only public transport, there are currently 500,000 public buses and 1.2 million taxis nationally. They constitute 1.7% of the total number of motor vehicles, but 27% of fuel consumption and more than 27% of total emissions. There is urgent need for public transport electrification. However, patchy technology among enterprises, relatively high vehicle purchase and related costs and under-developed business models have meant that the speed of uptake of electric vehicles has been unsatisfactory.

As a leader in new energy vehicles, BYD launched the e6 pure electric vehicle. It is well established and stable, with adequate range on one charge. It also launched a pure electric bus. Not only this, it has also led the effort in 'public transport electrification'. BYD successfully launched commercial operations of scale in locations such as Shenzhen, Xi'an, Baoji, Shaoguan, the Netherlands, Singapore, the United States, Denmark, Germany and London in the U.K. The 300 e6 pure electric taxis operating in Shenzhen have clocked up a total of almost 26 million kilometres (or 16 million miles). The longest distance of a single vehicle is now near 240,000 kilometers (149,000 miles), equivalent to more than 10 years of mileage for a regular private car. Similarly, the 200 pure electric buses operating in Shenzhen have an accumulated mileage of over 10 million kilometres (6.2 million miles). In addition, BYD has cooperated with local enterprises in Tianjin and Yunnan to manufacture and promote electric public transport, and to speed up public transport electrification. The latest solution of 'Zero vehicle purchase price, Zero costs, Zero emissions' will provide further support to electrification in funding and roll-out model.

Zero vehicle purchase price: free choice from three models
The so-called 'Zero vehicle purchase price' means that enterprise clients do not need to bear the vehicle purchase cost in one go, but it can purchase vehicles on a 'zero initial payment + payment in instalments' basis. To allow different types of clients to benefit from this, BYD is launching three operating models: a financial lease, an operational lease and buyer's credit. This also fulfils the different requirements of taxi and public bus companies. Clients can choose what suits them best.

Model

Financing Body

Lease Period

Ownership

Financial lease

Finance company

A complete electric vehicle operational life cycle (e.g. 5 years)

During the lease period, the financial organisation owns the electric vehicle. The taxi company pays the lease in instalments. After the lease period ends, the taxi company owns the vehicle.

Operational Lease

Third party vehicle lease company

A complete electric vehicle operational life cycle (e.g. 5 years) or a shorter period (e.g. 1 year)

During the lease period and after it ends, the vehicle lease company owns the vehicle. The taxi company and vehicle lease company sign an operational lease contract for the lease.

Buyer's Credit

The taxi company

The taxi company has ownership of the vehicle. The taxi company pays monthly instalments to the financial institution.



Zero costs: a profitable operational scheme
The new plan not only realises 'zero initial payment', but also because the price of electricity is much lower than that of petrol, the cost saving from usage will far outweigh the higher cost of purchase for the electric vehicles and even outweigh the higher cost of purchase itself. In Shenzhen for example, the BYD e6 taxi, after subtracting the 60,000 RMB government subsidy and 60,000 RMB local subsidy, the actual price is about 180,000. A Shenzhen taxi travels an average of 450km per day and operates for 353 days a year (taxis on average have a one-day service each month). It is estimated that the average fuel taxi consumes about 9 litres of petrol per 100km, and the price of petrol is 8 RMB per litre. But the e6 pure electric taxi consumes 26 kw per 100km, and the average price of electricity is 0.66 RMB. So each electric taxi saves 247 RMB per day, 7,166 RMB per month. If the hire car runs for 5 years, and the total saving over 5 years is deducted from the higher cost of the vehicle and the interest on multiple payments, it can save 326,400 RMB. This will be the profit in the operation of the pure electric vehicle.

Project

Regular fuel taxi

e6 pure electric taxi

Profit of pure electric vehicle compared to fuel vehicle

Operating expense over 5 years (RMB)

563,760

133,803

429,957

Price of vehicle (RMB)

100,000

180,000

-80,000

Tax of purchase (RMB)

8,547

15,385

-6,838

Interest incurred (RMB)

0

16,673

-16,673

Saving over 5 years (RMB)



At the same time, the new scheme of BYD converts a single payment into monthly instalments. During the agreed period, the saving from fuel/electricity each month is greater than the monthly payment. Even if it's monthly payment only without any down payment, the fuel/electricity saving is still sufficient to cover the monthly payment, greatly reducing the monthly pressure on the buyer. For example in Shenzhen, the sale price of each e6 taxi is 180,000 RMB (after deducting the national and local subsidies totalling 120,000 RMB), there is a five year loan without down payment, the monthly payment is 3,576 RMB, and the fuel/electricity saving per month is 7,166 RMB. This is equivalent to the customer only needing to use 50% of the money saved to pay the monthly instalment. Moreover, the greater the mileage, the greater the saving.

Using this scheme, taxi companies can not only realise 'purchasing a vehicle at zero cost', but can also enjoy the profits made from the petrol/electricity spread.

Zero emissions: Convenience of charging with electricity replaces consumption of petrol.
The scheme of 'Zero vehicle purchasing price, Zero costs, Zero emissions' not only provides convenience of purchase and saves operating costs for public transport and taxi companies, but also brings substantial social value. As the vehicles are pure electric, zero emissions and zero pollution, once scaled up, the energy saving and emissions reduction will be very significant. An e6 electric taxi saves 14,120 litres of fuel per year, with 32 tonnes fewer CO2 emissions, truly implementing zero emissions, zero pollution and green driving. If the 1.2 million taxis in China were all replaced by pure electric vehicles, in one year, 169 million litres of fuel could be saved, and CO2 emissions reduced by 38.62 million tonnes.

To support the scaling up of electric vehicles, BYD will join with electricity grid companies to develop the infrastructure, providing planning and technical support for the development of charging stations. BYD is also responsible for maintenance of the vehicles to resolve any problems encountered by the buyer during use of the new energy vehicle. Through this innovative model, BYD has broken the bottleneck on the promotion of new energy vehicles. It has resolved the difficulty of applying the sustainable development of zero emissions public transport in cities.

High quality financial support + mature vehicle models: Contributing to the scaling up of operations
The scheme has already gained the support of China Development Bank. It'll combine the financial strength of the bank with the industrial power of BYD. The parties plan to develop a financing platform, and to establish a financing model of full cooperation between a new industry group and financial group, to realise win-win for manufacturers, investors, operators and consumers and promote scaled up operation of electric public transport.

Analysts say pure electric vehicles as the mainstay of public transport in cities is coming to fruition. Demonstrating substantial economic and social benefits, with the promotion of this kind of mature operating model, new energy vehicles can achieve a breakthrough in a relatively short period of time.

About BYD
BYD is ranked #1 at the top of Bloomberg's and Business Week's 2009 Tech 100 List (http://www.businesswire.com/news/home/20100520006751/en/BYD-Tops-Bloomberg-Businessweek%E2 %80%99s-12th-Annual-Tech ) and is the leading manufacturer of advanced, environmentally-friendly battery technologies like the BYD's Iron Phosphate battery used in BYD electric vehicles and electric buses. BYD's solar panels and LED Lighting systems have CEC, TUV/CE and UL listings, and the company enjoys rapid growth in consumer electronics space and electrified transportation sector manufacturing under its BYD brand. BYD is the fastest-growing Chinese automotive and green energy technology enterprise. The Company trades on the Hong Kong Exchange (HKE) under the ticker numbers (HK.0285 – BYD Electronics) and (HK.1211 – BYD Company Ltd.), as well as on the Shenzhen Stock Exchange under the ticker number (002594 - BYD Company Ltd.). For more information, visit www.byd.com , www.facebook.com/bydcompany or email pr@byd.com