The company is trying to put a positive spin on its decision to abandon gas-powered cars, calling the move part of a "rebirth" to end its downward skid that has seen its profits evaporate over the last two years. Perhaps somewhat ironically, this so-called rebirth plan could send the company into a death spiral if BYD's EVs don't start to find a bigger audience in the near future.

I personally have been quite mixed on BYD in the past. On the one hand I think the company is risking its future by placing too much emphasis on EVs, even though most of the world's top automakers have failed to succeed in the space despite years of effort. On the other hand, I do like BYD's recent decision to focus on big customers who operate fleets of taxis and buses, since such customers have the resources to build necessary infrastructure and their driving patterns are more suited to EV use.

The most immediate problem for BYD is that time is emerging as its biggest enemy. Many of its bus and taxi fleet customers have launched pilot programs in the past year, meaning it will probably be at least another year or two before they place major orders if those programs are successful. In the meantime, the company is burning through lots of cash to support the EV program, even as its traditional car business sputters.

At the end of the day, this decision to abandon gas powered cars and issue new shares will probably buy BYD another year or two to keep developing its EV program. But the company could face a very challenging future if results from the EV pilot programs are mixed or negative, and it's quite possible that future won't include the continued support of Warren Buffett.

Bottom line: BYD's decisions to abandon traditional cars and issue more shares could buy it two more years to make its EV program succeed.

To read more commentaries from Doug Young, visit youngchinabiz.com