Shanghai: Audi AG said it is in talks to buy batteries from China’s BYD Co. for its locally made cars, a move that would break the luxury automaker’s reliance on a single supplier in the country as it rolls out new electrified models.
“We are in talks with BYD, but I cannot tell you details,” Gaby-Luise Wuest, Audi’s recently appointed Audi China president, said in an interview ahead of the Guangzhou auto show. People familiar with the matter said in August that Audi was in talks with Warren Buffett-backed BYD, China’s top electric carmaker and No. 2 auto-battery supplier, as well as other potential suppliers.
Audi, owned by Volkswagen AG, plans to start selling nine new-energy models in China over the next two years, with more than half of the new models purely battery-electric, Wuest said.
VW has set a goal of becoming carbon-neutral by 2050 and has been pushing to electrify its fleet. The world’s largest automaker will invest more than 4 billion euros ($4.4 billion) next year to add battery-car production and more SUVs to its line-up. Audi is its biggest profit generator, and every third customer of the brand comes from China.
Electric-vehicle sales in China have been held back by cutbacks in subsidies and stagnant consumption, even as contenders from Daimler AG’s Mercedes-Benz to Tesla Inc. bring out new models. Audi is working hard to maintain relationships with local OEMs as well as suppliers, Wuest said.
“It’s a painful transition,” Wuest said, referring to costs of electrification. But “there is really no other way” under stricter emission regulations, she said.
Carmakers are seeking to diversify supplies of critical components as the roll-out of electric models gains traction. VW plans to deliver 22 million fully electric vehicles worldwide by 2028, with more than half of them built in China. Audi currently uses battery cells from Contemporary Amperex Technology Co. Ltd. for its Q2L e-tron Sport Utility Vehicle sold in China.