How Much Will BYD Share With Daimler?

SHANGHAI, China — Following the official announcement earlier this week that Daimler AG and BYD Company have agreed to form an electric-vehicle venture, the Chinese battery and EV specialist has said it will not open its core technology on lithium batteries and EV systems to its new German partner.

BYD's "clarification" was reported by a number of Chinese media outlets. BYD was quoted as saying that Daimler will provide the vehicle platform and BYD will contribute the EV and battery technology for a new electric vehicle and new brand being developed for the China market.

In December, Daimler executives said the company plans to launch a pilot program in China in 2010 to test acceptance of a new battery-electric version of the Smart Fortwo, dubbed the Smart ED.

BYD previously has signed cooperative deals with Volkswagen and with China's largest automaker, Shanghai Auto (SAIC), a partner of both VW and General Motors.

In December, SAIC announced that it would form a battery joint venture in China with A123 Systems, the U.S. maker of lithium-ion batteries. The venture, to be called Shanghai Advanced Traction Battery Systems Company, will be 51-percent owned by SAIC and 49 percent by A123.

Meanwhile, BYD's agreement with VW has shown little progress since the deal was announced last May.

Inside Line says: The official announcement on Monday said the partners plan to establish a joint technical center in China to design, develop and test EVs, so BYD's latest "clarification" that it will not reveal some of its technology to Daimler has simply confused the issue. — Hu Lei and Paul Lienert, Correspondents