China's BYD Auto And Volkswagen Reportedly Have A Battery Deal In Place

China's BYD Auto and Volkswagen have confirmed that they will cooperate on the development of lithium iron phosphate batteries. That's according to Gasgoo.com, which based its account on a recent story in the Beijing News.

"BYD is willing to cooperate with foreign automakers on iron battery development," BYD sales manager Wang Jianjun reportedly told the newspaper, which added that BYD is "in talks with a number of foreign companies on supplying them with battery products."

Iron-phosphate is one of several battery technologies that the automobile industry is developing. The technology offers a relatively low-cost alternative to other types of lithium-ion batteries.

(Engineers at MIT have come up with a way to turn lithium iron phosphate,  a common compound several hybrid- and electric-car battery developers are working with, into a super-expressway  for  electrical energy: a breakthrough that could dramatically reduce charging time for lithium batteries.)

GasGoo.com reports that, during an appearance at the Shanghai Auto Show last week, Volkswagen CEO Martin Winterkorn said that BYD Auto employees will be heading to his company's headquarters to demonstrate the battery technology.

BYD Auto earlier this year began selling the world's first mass-produced plug in F3DM plug-in hybrid, which uses lithium iron phosphate batteries. Sales, which have been slow, at present are restricted to China. But the company has said it will export the cars to North America and Europe next year.

BYD Auto also has indicated that it is willing to license its technology to other car companies. Global Insight, an economics and politics forecasting company, reported that automakers in the U.S., Europe and Japan have shown interest.

Back in January, we noted that such deals, whether with BYD Automotive or another hybrid maker, would be a double-edged sword. Licensing plug-in hybrid technology would enable smaller carmakers to ready competitive hybrids more rapidly and at less expense than if forced to develop their own technology, but would leave a foreign entity in control of a key resource.

BYD Auto has caught the eye of investor Warren Buffett, who last September paid $230 million for a 10 percent stake in the company.

Fortune Magazine last week quoted a BYD Auto investor as saying that the company is ready to market a car that travels 250 miles on a charge. "We want to introduce the car in the U.S.," Li Lu, founder of Pasadena, Calif.-based LL Investment Partners said last week at a Fortune magazine "green brainstorming" conference in Laguna Niguel, Calif.

During a panel discussion, Lu said that BYD is capable of producing an automotive battery that would go for 300 miles to 400 miles on a charge: "We can do a 300-mile battery today. But it's really heavy stuff, cuts into the space of the car. It's a matter of what the consumer really needs."

Lu, whose firm has a 2.5 percent stake in BYD Auto, said that when the Chinese company sells cars in the U.S. "we will do our manufacturing here."

Greg Johnson, Contributor

Posted by

Greg Johnson April 27, 2009, 11:20 AM

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BYD, China, Hybrid, Japan, Plug-ins and Electric, Volkswagen

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