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Chinese BYD and Daimler to Develop Electric Car

Shenzhen BYD Daimler will make a new brand EV for China.

by on May.27, 2010

The cost and range of batteries for EVs remains a significant impediment.

BYD Company Limited and Daimler AG today signed a contract creating a 50:50 joint venture called Shenzhen BYD Daimler New Technology Co. Ltd. The new firm will develop an electric vehicle for China under a new brand name.

Daimler and BYD will invest RMB 600 million capital for the firm. Chinese industrial policy requires joint ventures to gain access to its protected market.

The Communist central government also has repeatedly stated its desire to rationalize the Chinese automobile industry around Chinese companies.

In a joint statement, both parent companies said that a new generation of electric vehicles developed will capitalize on Daimler’s expertise in electric vehicle architecture and safety, and BYD’s knowledge in battery technology and e-drive systems. No further technical details are available.

The new car will be marketed under a new brand jointly created and owned by Daimler and BYD, which is China’s fourth largest automaker. Export plans are unknown. However, all nations with industrial policies are attempting to establish local makers and protect home markets for green vehicles, a development that is creating concern among global  market advocates.

BYD is an acronym for Build Your Dreams. It remains to be seen if BYD can meet its self-proclaimed goal of becoming the number one maker in Asia by 2013, and world’s biggest by 2020.

The signing formalized a memorandum of understanding on that was established last March 1. Since then BYD has announced that it intends to launch the “e6,” a pure electric vehicle in a conventional small minivan wrapper with seating for five. (See BYD Chinese made EV on Sale in U.S. Late 2010 )

The company, a multi-national giant in the production of lithium ion cell phone batteries, has made several product claims that imply that its Fe version of the e6 battery — essentially a change in chemistry that separates it from other types of lithium ion or nickel batteries used in EVs — could be a breakthrough. The cost and  range of batteries for EVs remains a significant impediment to increasing sales, unless massive taxpayer subsidies are provided.

“Together with Daimler we are making excellent progress identifying opportunities to utilize the strengths of both companies to create a new brand of electric cars for China,” said Wang Chuanfu, Chairman and President of BYD Company Limited. “This is a unique and exciting initiative and together we are pushing hard to bring this new electric vehicle to market as soon as possible.”

Engineers and designers from both companies established working teams after the signing of the MOU to begin working on the vehicle concept. The business license for the new joint venture is subject to government approvals.

Daimler recently launched the smart fortwo electric drive, and this year will introduce two Mercedes-Benz electric cars: the B-Class F-CELL with fuel cell technology, as well as the battery electric A-Class E-CELL.

BYD introduced its F3DM dual-mode hybrid electric vehicle to the world in December 2008 and started direct sales to individual customers in March 2010. The company recently launched the e6, a pure electric vehicle and became the first manufacturer in China to commercialize taxi business with its e6.

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