(By Horacio Marquez) Not many investors noticed in September 2008 when Warren Buffet took a 10% stake in Hong Kong-based battery maker BYD Co. Ltd. for $230 million.
They should be noticing now.
Shares in BYD, which also makes cell phones and automobiles, have quintupled in a little more than 12 months, meaning that Buffet's investment is now worth more than $1.5 billion.
But Buffet's interest in this little-known Chinese stock isn't the main story here. In fact, the investing icon is simply focusing a bright spotlight on an industry that could serve as a major profit play for years to come.
The real story here is battery power, a technology market that's heating up in a big way. Just the market for rechargeable batteries is expected to zoom from $36 billion in 2008 to $51 billion in 2013.
And yet the battery market gets less attention than solar or wind power, its higher-profile (but less-technologically developed) cousins.
Modern battery technology is the keystone of the global push to find an energy alternative for oil. In fact, a specific new category of rechargeable batteries is actually a "breakthrough" technology that has the potential to replace as much as 148 billion barrels of oil over the next 50 years, a potential savings of $10.4 trillion – even at current prices.
And oil prices will certainly blast well above the current $78.50 a barrel as supplies diminish.
What these numbers don't tell you is that there's a powerful catalyst at work, one that's behind the big push to develop new, rechargeable battery technologies: the electric – or "hybrid" – car.
Billions Bet on "Third Element" Technology
While last year's record oil price of $147 a barrel served as a wake-up call for the car-driving consumer, it was also the catalyst that shifted the plug-in-auto industry into high gear.
In response to the oil price surge in 2008, U.S. President Barack Obama promised to invest at least $150 billion on alternative energy during his term.
But a big chunk of his $787 billion stimulus bill will finance development of a new, rechargeable battery technology for Plug-in Hybrid Electric Vehicles (PHEV).
The technology in question: Lithium-ion.
Sometimes referred to as the "Third Element" – because of its No.
