Germany's Robert Bosch, South Korea's Samsung SDI and China's SAIC Motor Corp are in advanced talks to produce lithium-ion batteries in China to take advantage of the country's strong backing for clean energy cars, a senior Bosch executive said on Friday.
Such a tie-up would pit them against local rivals such as Warren Buffett-backed BYD Co and Great Wall Motor, which have all announced plans to tap the fast-growing clean energy vehicle market.
Bosch, Samsung SDI, SAIC in China talks
"We are in the final stage (of talks)," Roland Ehniss, a Bosch executive vice-president, told Reuters on the sidelines of the Global Automobile Forum in the southwestern city of Chengdu, adding that he hoped the venture could start production by 2012.
Initial production would have to be above 20,000 units a year for the project to be commercially viable, Ehniss said, and they were still discussing if it would be a two or three-party joint venture.
"We have talked to a lot of customers, local car makers, including SAIC and some foreign car makers," he said. "We are talking with nearly every company who is interested to get a battery with high power density and hopefully competitive costs."
He said the battery was not directly comparable with BYD's F3DM technology, as they were working on different platforms.
The German auto parts giant set up a 50-50 joint venture with Samsung SDI in 2008 to make hybrid electric vehicle batteries from 2010 with a minimum investment of $500 million for four to five years.
Bosch already has an auto parts joint venture with SAIC, China's largest automaker, in which the German firm has a 51 percent stake. Under the deal being discussed, Bosch and Samsung SDI could fold some of their existing venture's manufacturing and development activities into a new China-based tie-up with SAIC.
"We (will) bring the battery company to China and integrate it into our joint venture with our Chinese partner," Ehniss said. He said the companies were discussing the shareholding structure of the venture.
China has become an extremely lucrative market for foreign carmakers, having surpassed the United States last year to become the world's No. 1 auto market as sales took off, fuelled by a raft of policy incentives from Beijing.
Of this, electric vehicles have become particularly attractive, lured by a string of government subsidies aimed at developing green energy initiatives.
