November 22, 2014

Volkswagen and BYD get cosy

VW and BYD have signed an agreement to work together on developing battery technology (BYD F3DM plug-in Hybrid pictured).

VW and BYD have signed an agreement to work together on developing battery technology (BYD F3DM plug-in Hybrid pictured).

Volkswagen has announced that it has signed a Memorandum of Understanding with Chinese car maker and EV specialist BYD to work together “in the area of electric mobility”. Seems sensible.

BYD have been in the news lately with their next generation electric car technology, and VW is keen to be pro-active in the development of Electric Cars, so a tie-up with BYD – even a relatively informal one like this – is an eminently sensible way to go. And with the rise and rise of the Chinese market, and its car makers, linking up with a high-profile Chinese company makes a lot of sense.

VW are following close behind Mercedes, who recently announced that they have taken a 10% stake in Tesla, which was a logical follow-on from them using Tesla’s battery technology in the Smart EV. And it’s an indication that the way forward for all car makers is by closer co-operation. Going it alone is going to become harder and harder as the pace of technological change speeds up and car makers need to invest in new technology.

Sharing the costs of developing new technology, and new cars, is far more cost-effective than ploughing a lone furrow. As Fiat’s boss said just before Christmas, it’s going to become less and less viable for any but the biggest and smallest car makers to run a profitable business in the future. Co-operation, MOUs, partnerships, mergers and takeovers are going to see the car landscape change dramatically in the next few years. Let’s just hope we don’t end up with every car, from every manufacturer, basically a variation on a theme.

But despite BYD’s lead in battery technology, they are still prone to the same disease that afflicts so many car manufacturers in China – Clone Cars. We recently brought you news on what is believed to be a 2.0 litre clone version of Porsche’s Cayenne – attributed to BYD.

I wonder if VW had a chat about that at their meeting!

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