Manufacturing News

Daimler, BYD plan new EVs for China

Daimler AG and BYD Co. plan to expand their partnership to bring new electric vehicles to China as Beijing weighs a proposal to phase out fossil-fuel powered vehicles.

BYD is discussing more investment in Shenzhen Denza New Energy Automobile, its 50-50 venture with Daimler, BYD Chairman Wang Chuanfu said.

The two automakers are working together to add more models under the Denza brand, Wang said, without elaborating.

Currently the marque sells just one model, a five-seat sedan. Denza has been unprofitable since 2014, the year the model hit the market.

BYD and other EV producers hope to benefit from a surge in demand for the non-polluting vehicles as China prepares to set a deadline to end the sale of automobiles powered by gasoline and diesel fuel.

To boost the EV market, China’s government may ease curbs on foreign investment in electric vehicles, a commerce ministry spokesman said Thursday.

In 2012, Daimler partnered with BYD to produce and sell electric cars under the Denza brand. In May, BYD said it would increase its 500 million yuan ($76 million) investment in the joint venture, with a matching contribution from Daimler.

Other automakers such as Volkswagen Group also have partnered with local manufacturers, allowing them to postpone construction of their own EV production lines.

A report on Wednesday said China is discussing a plan to allow foreign carmakers to set up wholly owned EV businesses – a major departure from current rules that require them to form joint ventures with Chinese automakers.

Leading sales
In the first seven months of the year, BYD was China’s top EV seller with deliveries of 46,855 EV and plug-in hybrids, 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 has sold 738 cars that run on electricity since it introduced the Velite 5 plug-in hybrid model at the Shanghai auto show in April.

To help reduce reliance on fuel imports and curb emissions, China has offered various incentives to speed up adoption of EVs.

Regulators are poised to unveil a cap-and-trade policy that would require automakers to sell more EVs, or buy carbon credits from other automakers.

On Sept. 9, an official said the government is working with regulators on a timetable to end sales of internal combustion engines. France, the United Kingdom and the Netherlands have announced similar moves.

Wang expects China to ban sales of all polluting vehicles by 2030. BYD may supply batteries to competitors during auto industry’s transition to electric powertrains, he added.

The company expects to announce its first contract by the end of the year, he said.

"We are talking to a lot of automakers about selling vehicle batteries and we have a big plan for that," Wang said. "I am sure it will be a big business for us in the future."

Daimler and BYD in China produce an electric sedan under the Denza brand.

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