From Caijing Online

China's largest maker of cell phone batteries and electric vehicles said it will soon launch the country's first, mass-produced hybrid car.

President and CEO of BYD Co. (HKSE: 001211) Wang Chuanfu told Caijing at the 2008 Guangzhou International Auto Show, which opened in Guangzhou City on November 19, that the company will start selling the F3DM plug-in hybrid compact sedan on December 15.

F3DM is a duel-model vehicle that can switch between a fully electric mode and a hybrid one that uses both electricity and gasoline. BYD claims the F3DM can travel as far as 100 miles after one charge under its full-electric mode. With the small gasoline engine engaged, it can support longer trips.

After five years of research and development, the F3DM, which is currently awaiting government approval, is expected to be launched in 14 Chinese cities including Guangzhou and Shenzhen. The vehicle could carry a price tag of about 150,000 yuan. But Wang Chuanfu said if the annual production capacity can be increased to more than 100,000 vehicles, the price would be reduced by 20 percent. He called for government subsidies for new energy cars, which would further reduce prices.

Beijing has recently encouraged the auto industry and local governments to push forward research and development of electric vehicles.

In March this year, the Shenzhen city government won approval from the Ministry of Science and Technology for an electric-vehicle research project. Under the project, the city government will invest 50 million yuan to open three public transportation lines that will be serviced by 10 hybrid busses. The government also plans to draft new regulations for electric vehicles and allocate subsidies to buyers.

Shenzhen-based BYD will head research and production for a fully electric sedan under its home city's new contract.

In September, BYD received US$ 231 million from MidAmerican Energy Holdings Co., a subsidiary of U.S. billionaire Warren Buffett's Berkshire Hathaway Inc., which the company said would help BYD's products and technologies reach deeper into the global market. Even before it received this windfall, BYD had announced plans to sell hybrid cars in the U.S. as early as 2010, and said it will roll out its first fully electric auto in China next year.

Despite the energy and funds being poured into R&D, the electric vehicle industry still faces a gamut of challenges from high production costs and unstable performance. The only hybrid car  that has succeeded in global market so far is Toyota’s Prius. But the Prius' annual sales in China is expected to reach only 3,000 in 2008, due to its 300,000 yuan high price.

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