Buffett's BYD stake to get boost from SAIC deal

Berkshire Hathaway (BRK)'s shrewd move in purchasing 10% stakes of Chinese battery and electric car maker BYD Co has earned BRK around $1 billion over the past eleven months.

Now it's likely to earn even more as BYD just reached a deal with Shanghai Automotive Industry Corp (SAIC) to supply the automaker with lithium-ion batteries for its own brand Roewe hybrid vehicles.

Because of confidentiality agreements, BYD itself declined to reveal the identity of the partner.

SAIC unveiled plans in July to introduce a hybrid Roewe 750 sedan next year that could improve fuel efficiency by 20 percent compared with the existing model. It also plans to provide nearly 1,000 new-energy vehicles, including electric, fuel cell and hybrids, for World Expo 2010 Shanghai.

In April, Troy, Mich., auto parts maker Delphi Corp - along with li-ion battery maker A123 Systems Inc - agreed to supply hybrid technology to SAIC Motor Corp for its mild hybrid vehicle due to hit Chinese roads in mid-2010. SAIC is looking to launch an all-electric car by 2012.

The potential SAIC deal would add heft to BYD's business in China. Reuters notes that late last month that SAIC Motor announced plans to invest 3 billion yuan ($439 million) over the next three years to develop new-energy sedans.

Thus with this significant deal as well as BYD's own brand project, Warren Buffett is set to get a boost from his China friend.