BYD-Daimler is Building a 40,000-Unit EV Production Capacity in Shenzhen

The joint venture between BYD and Daimler is constructing a production line in Pingshan, Shenzhen, which can roll out 40,000 DENZA-brand electric cars a year, according to the company’s CEO Lian, Yubo. The capacity is lower than the previous estimate but vastly exceeds the current market demand.

When entering the alliance with BYD in 2010, Daimler already had two local partners–BAIC and Fujian Motors. As the government forbids any foreign company to have more than two car-making ventures in China, the BYD-Daimler partnership has been defined as a coalition in technology rather than a (separate) carmaking company. For that reason, it chose to create the production capacity within BYD’s Kengzi factory in Pingshan. Installation of the product line, currently underway, will be completed by the end of June.

The first car to roll out will be a pure-electric sedan scheduled to debut at this year’s Guangzhou Auto Show and hit showrooms in mid-2014. "The DENZA car will be positioned above all current BYD models and target mainly consumers in large cities," said Mr. Lian. Next month the joint venture will start signing up dealers, the first three of which are said to come from Beijing, Shanghai, and Shenzhen.

South Korea’s LS Cable & System announced in July last year that it won a contract to supply DENZA EVs with high-voltage harnesses. Wiring sets enough for building 260,000 cars would be delivered over a period of five years. Based on this disclosure some estimated BYD-Daimler would have an annual capacity of about 50,000 units.

How the joint venture plans to sell 40,000 DENZA cars a year remains a mystery (especially considering that DENZA will focus exclusively on the local market in the first few years). In 2012, only 12,791 plug-in EVs were sold in China, and most of them were low-cost, short-range models like the electric Chery QQ and JAC J3. BYD’s e6, with a relatively long range (250-300km) and high price tag (369,800 Yuan before rebates), posted only 2,091 sales.