(Reuters) - Warren Buffett-backed Chinese carmaker BYD Co Ltd rolled out Hong Kong's first electric taxi fleet on Wednesday, marking a milestone for its all-electric battery car that highlights its promise and its limitations.
"We expect to increase the number of e6 taxis in Hong Kong to 5,000 in three years," said Liu Xueliang, general manager of BYD Asia Pacific sales, after the company announced it is making a push in the former British colony to encourage the use of its all-electric e6 taxi.
The Hong Kong Taxi & Public Light Bus Association said it is renting from BYD an initial fleet of 45 taxis for HK$8,000 ($1,000) each per month, although only six vehicles had licenses so far. The association is BYD's only Hong Kong customer to date.
The e6's use in Hong Kong's taxi fleet points to the technology's promise as a "zero-tailpipe-emission" vehicle, but its high cost has resulted in sluggish sales for private use, the very demand that BYD had been counting on to boost sales.
The e6 sells for 369,800 yuan ($60,200) in mainland China and HK$448,000 ($57,700) in Hong Kong.
When BYD launched the car a few years ago in China, the e6 was intended for private use on the mainland and in the United States, but never quite caught on. BYD sold about 1,700 e6 vehicles in China last year, according to industry data.
The e6's failure to prove popular among everyday consumers is not only bad news for BYD, it illustrates how China's policy goal of putting 5 million "new-energy" cars on the road by 2020 is not going as planned.
China's central government defines new-energy cars as either all-electric battery cars or heavily electrified plug-in hybrid vehicles.
To make up for slow sales of the e6, BYD executives told Reuters last month it planned to start promoting conventional gasoline-electric hybrid technology. They said BYD might stop over the next few years making all-gasoline cars and sell only electric-assisted cars such as conventional hybrids or all-electric vehicles.
Liu said on Wednesday that two to three new cars in the pipeline would be hybrids, but he gave no date for their release.
In addition to promoting the e6 as a taxi, BYD is also offering the e6 to private consumers in Hong Kong, just an hour by car from its headquarters in the southern Chinese city of Shenzhen.
"If Hong Kong's 18,000 taxis and 12,000 diesel-fuelled buses are all replaced with electric cars, the reduction of emissions will be equivalent to that of 800,000 private cars and it will reduce Hong Kong's emissions by 50 percent," said Wang Chuanfu, the billionaire engineer who founded BYD.
The launch of the fleet comes as Hong Kong is seeing increasingly high pollution readings, due in part to the rising number of cars on the city's already congested roads.
Shares in BYD have tumbled about 60 percent since a late 2009 peak. The stock was up nearly 5 percent on Wednesday at a two-year high of HK$33.30, beating a 0.4 percent gain for the benchmark Hang Seng Index.
($1 = 6.1428 Chinese yuan)
($1 = 7.7615 Hong Kong dollars)