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UPDATE 2-Daimler and BYD sign agreement on electric cars
March 1, 2010 / 5:58 PM / 8 years ago

UPDATE 2-Daimler and BYD sign agreement on electric cars

* Daimler, BYD to develop electric cars for China

* New brand to be created by Daimler and BYD

* Daimler BYD in talks to extend cooperation agreement

* BYD provides battery know-how, Daimler car expertise (Adds details, background, CEO quotes)

FRANKFURT, March 1 (Reuters) - Daimler (DAIGn.DE) plans to to develop electric cars for China with battery maker BYD (1211.HK), underscoring the German auto maker’s dependence on outside companies to gain share in the market for zero-emission vehicles.

Daimler’s alliance continues a trend among European auto makers, which have scrambled to strike alliances with battery makers as a way to expand into electric and zero emission cars. [ID:nT230151]

Early movers such as Toyota Motor Corp (7203.T), Nissan Motor Co (7201.T) and Mitsubishi Motors Corp (7211.T) have set up joint ventures to produce batteries with Panasonic, NEC and GS Yuasa Corp (6674.T), respectively.

Hong-Kong listed BYD is backed by U.S. billionaire Warren Buffett and has its roots as a battery maker for Nokia NOK1V.HE and Motorola MOT.N. It will provide expertise in battery technology, while Daimler will provide experience in electric vehicle architecture, Daimler said.

“We will be able to participate in the potential growth of electric mobility in China, currently the largest auto market of the world,” Daimler Chief Executive Dieter Zetsche said in a statement.

“Electric vehicles are especially well suited for urban driving. With its many metropolitan areas, China has the potential to be among the world’s largest markets for zero-emission vehicles,” Zetsche said.

Daimler and BYD will establish a new brand for the Chinese market, and will build a technology center in China to develop and test the vehicle, Daimler said.

BYD is one of the the fastest growing Chinese auto makers with plans for agressive expansion in to Europe. [ID:nTOE61M07N]

Wang Chuanfu, chairman and president of BYD said, “This technology partnership creates a win-win business model with complimentary competences. We are very excited about this opportunity to work together with Daimler, the inventor of the automobile.”

Daimler follows in the footsteps of Europe’s largest auto maker, Volkswagen (VOWG.DE), which last year said it had plans to explore a partnership with BYD Co in the area of hybrids and electric vehicles powered by lithium-ion batteries. [ID:nLP324277]

As a way to boost its competence in battery technology, Daimler bought a stake in Tesla Motors Inc, a California start-up that has used its battery technology to create high-performance sports cars under its own brand. [ID:nLD686182]. (Reporting by Edward Taylor, +49 69 7565 1187; edward.taylor@thomsonreuters.com)

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