Daimler/BYD Joint Venture to Make New EVs for China

Chinese automaker and battery manufacturer, BYD (Build Your Dream), and Daimler AG, owner of Mercedes-Benz, have created a 50-50 partnership for a new green car project. Shenzen BYD Daimler New Technology Company will make all-electric vehicles for sale in the Chinese market.

Under the new contract signed by Daimler Chairman Dieter Zetsche and BYD Chairman Wang Chuanfu, the two companies will be investing 600 million yuan ($87.9 million) to be used as registered capital for the joint venture which will be located in the southern industrial city of Shenzen. They believe that China will be one of the largest markets for new all-electric, zero emission cars.

Zetsche said, “Our new joint venture is well-positioned to make the most of the vast potential of electric mobility in China.”

The new all-electric model produced by the joint venture will most likely use an electric propulsion system similar to the one in the BYD e6 all-electric battery car. BYD began marketing the e6 to taxi companies in Shenzen this year. Daimler technology will be added to produce a technologically advanced, safe new EV.

BYD, which is partially owned by Warren Buffet’s MidAmerican Energy Holdings Company, has been in the news this year for record sales numbers.

Engineers and designers from Daimler have set up offices at a hotel near BYD headquarters in Shenzhen and have begun work on the first vehicle for the new brand. A prototype of the vehicle could be unveiled at the Paris auto show in October.

The push for electric vehicles and hybrids comes in part from the expectation that the Chinese government will soon offer consumers huge incentives on green car purchases. Nissan Motor Company, which will soon launch the Leaf all-electric small car in the U.S., says that the incentives for purchase of clean-energy vehicles may be up to 60,000 yuan. News reports from China indicate that incentive offers on electrics ranging from 50,000 to 60,000 will probably be announced soon.

Some Chinese officials are not in favor of the incentives, and are voicing their concerns even as auto companies are arguing for their implementation.

Speaking with reporters following last year’s Tianjin conference, senior official at the National Development and Reform Commission Chen Jianguo asked, “Why do we need to provide subsidies and rebates for wealthy private buyers who would be the first in line to buy electric cars? That’s a question some of us in the government are asking.” The National Development and Reform Commission is the primary economic planning agency in China.

Also launching all electrics and/or hybrid vehicles in the Chinese market in the near future are Mitsubishi Motors Corporation, Toyota Motor Corporation and General Motors Company.

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