Beijing Ban could fuel Electric Vehicle Demand

Google Images: Traffic in China

Chinese media reported on Thursday that Beijing officials will soon begin taking more than a quarter of a million cars off the road.

 

In an effort to ease traffic congestion and heavy pollution, Beijing is banning high-polluting cars from the roads at least one day a week. Drivers of these particular vehicles, which are known as “yellow-label” vehicles, will be fined about $15 if they're caught driving within the city's Fifth Ring Road, which is just outside Beijing.

 

The plan is expected to take about ten percent of the city's cars off the highway.

In addition to the fining structure, Beijing officials have also offered drivers up to $3,600 to give up their cars during 2009, as well as dedicated loans for transport companies willing to upgrade their fleets to meet lower emission standards.

 

This is certainly good news for BYD Company (HK:1211), which has officially launched its first mass-produced electric car in China. It's called the F3DM, and is available in 14 Chinese cities. The vehicle gets about 60 miles on one charge, and has a top speed of about 100 mph. This is also the company that picked up $230 million from Warren Buffett last September.

 

BYD expects to introduce the $22,000 vehicle in the U.S. in just two years.

 

This, my friends, is what Detroit is up against.

 

For more on BYD, and other “clean” opportunities stemming from China's pollution problem, click here.

For more info: BYD, Alternative Energy Investing