What's Keeping BYD From Coming To California? Patent Problems?

We have covered the Governator wooing not-so-gloriously-doing BYD to come to California, well, at least with a headquarter building. We were also interested to hear that BYD “is in talks with officials in Los Angeles to supply all-electric battery buses in the city.”

The Wall Street Journal revisited old investigative reporting glory and did some thorough digging into the matter. And here is what transpired, all as per the WSJ:

• It was LA’s first deputy mayor Austin Beutner who had convinced BYD Co. to open its first U.S. headquarters in the city of angels. Schwarzenegger took the photogenic credit.
• As an inducement, LA city agreed to stock part of its municipal vehicle fleet with BYD’s all-electric battery car, powered by what the WSJ calls “generally still-unproven advanced lithium-ion battery technology.” The whole thing was dressed-up as a field test.
• The city is also in talks to buy all-electric buses from BYD, which might eventually set up a factory to supply those e-buses to the city.

Now it’s beginning to make sense.

However, the WSJ found a fly in the ointment that greased the deal. “An individual close to BYD” ratted on the company and disclosed to the WSJ that what’s really holding up the the planned launch of BYD’s all-electric e6 sedan this year was not the woeful infrastructure that fails to deliver enough charging points. The source said that there was a problem involving possible intellectual property infringement with the lithium powder BYD uses in its car batteries.

That problem is now supposedly solved, but according to the WSJ, “questions over the legality of the company’s technology are bound to persist as the company begins test-marketing the e6 car next year.”

If BYD already has IPR problems in China, those problems could mount exponentially once the company plants stakes in the litigious U.S., especially in lawsuit-happy California, which is called “The Golden State” for a reason.

When asked, Beutner told the WSJ that the city welcomes investors, but “we expect all of them will comply with all applicable laws.” So there, problem solved.