BYD Plans to Expand Daimler Partnership With New EVs for ChinaBloomberg News
Mulling investment boost to equal venture, chairman says
Chinese carmaker considering supplying batteries to rivals
BYD Co., China’s leading maker of electric cars, plans to expand its cooperation with Daimler AG to bring new models to the latest and largest market seeking to phase out fossil-fuel powered automobiles.
BYD is discussing more investment in Shenzhen Denza New Energy Automobile Co., its 50:50 venture with Stuttgart-based Daimler, BYD’s founder and chairman Wang Chuanfu told a group of reporters in the southern Chinese city on Thursday. The two are working together to add more models under the Denza brand, Wang said, without elaborating.
The EV maker, backed by Warren Buffett, is among companies preparing to benefit from a surge in demand for the non-polluting vehicles as China prepares to set a deadline to end production and sales of automobiles powered by gasoline and diesel. Besides policy incentives to promote sales of the cars, authorities will also study measures to ease curbs on foreign investment in new-energy vehicles, a commerce ministry spokesman said Thursday.
Daimler has partnered with BYD to produce and sell electric cars under the brand Denza since 2012. BYD said in May it will increase the 500 million yuan ($76 million) investment in the joint venture, with matching contribution from Daimler as well.
Like Daimler, automakers including Volkswagen AG have also partnered with local manufacturers, allowing them to put off setting up their own production lines from scratch.
BYD led makers of less-polluting vehicles in the first seven months of this year, delivering 46,855 electric and plug-in hybrid cars, according to the China Passenger Car Association. Beijing Electric Vehicle, the EV division of state-owned BAIC Motor, followed with 36,084 units. By comparison, General Motors Co. has sold 738 cars that run on electricity since it introduced the Velite 5 plug-in hybrid model at the Shanghai auto show this April.
To help reduce reliance on fuel imports and curb emissions, China has been rolling out various incentives to help speed up adoption of electric vehicles.
Regulators are poised to unveil a policy that will require automakers to earn enough credits or buy them from competitors with a surplus under a new cap-and-trade program for fuel economy and emissions. An official said Sept. 9 that the government is working with regulators on a timetable to end sales of internal combustion engines. France, the U.K. and the Netherlands are other countries that have announced similar moves.
Shares of BYD have rallied more than 50 percent since the official’s comments as investors bet the policy will help leapfrog sales of its vehicles and batteries in the run-up to compliance. The stock rose 4 percent to HK$71.65 on Thursday.
Predicting China will likely order an end to sales of all polluting vehicles by 2030, Wang said BYD is considering supplying batteries to competitors as the industry faces production challenges during the switch in powertrains and also exploring joint investments. The company expects to announce the first contract by the end of the year, he said.
“We are talking to a lot of automakers on selling vehicle batteries and we have a big plan for that,” said Wang. “I am sure it will be a big business for us in the future.”
— With assistance by Ying Tian, and Yan Zhang