Chinese company working with L.A. has been stumbling

That would be carmaker BYD Co., which is receiving a modest $5.2 million worth of incentives from the city as part of a plan to establish a U.S. base for its electric car operations (still only a tiny portion of the company). Less than a year ago, shares in BYD had reached an all-time high, and Warren Buffett, who had bought a 10 percent stake, was singing the company's praises. Since then, BYD's stock price has tanked, with August auto shipments falling 19 percent from a year earlier. Rival firms gained 19 percent that month. There's also word that BYD might not deliver its E6 electric model to the U.S. before the second half of 2011, though a company spokesman tells Bloomberg that the plan is still to ship the cars to California this year. The problems center less on the company's electric car program and more on its current line of vehicles (this year's sales forecast was slashed by 25 percent). Forbes Shanghai bureau chief Russell Flannery has some ideas:

Part of the problem with BYD's shares this year has been that investors were too optimistic about [Chairman Wang Chuanfu's] ability to deliver growth. BYD's electric car business may be large in the future but it is currently small. Also, in the here and now, BYD's conventional auto business has gotten negative press beyond the August sales drop.

Next week, Buffett, along with Microsoft founder Bill Gates will visit the Chinese carmaker, and you can expect a bunch of cheesy photo ops with Buffett behind the wheels of the BYD models.