Volkswagen is looking to grow its expertise in hybrids and electric cars by exploring a partnership with Chinese automaker BYD.

Though VW is Europe's largest car company, BYD has considerable experience in lithium-ion batteries and is a division of BYD Co., which produces them for cell phones.

The deal was announced Monday after BYD officials visited VW facilities in Germany. No terms were revealed.

Volkswagen said the move allows it to expand its alternative-propulsion strategy, called BlueMotionTechnologies, and could help it grow in China. VW also has announced deals with Sanyo and Toshiba for partnerships involving electric cars.

BYD is a small player compared with VW, but it received a $230 million investment last September from a firm owned by American billionaire Warren Buffett. BYD appears to have ambitious growth plans and said at the Detroit auto show that it wants to bring an electric car to the United States.

Based in Shenzhen, China, BYD has been making cars since 2005. It has a plug-in hybrid, the F3DM, on sale in China and is planning to launch five vehicles in 2009, including two with alternative powertrains: the F6DM plug-in hybrid and the e6 electric van.

"Particularly for the Chinese market, potential partners such as BYD could support us in quickly expanding our activities," Volkswagen board member Ulrich Hackenberg said in a statement.

The VW-BYD agreement parallels a deal announced last week involving another German giant, Daimler, which purchased a 10 percent stake in California electric-car maker Tesla.

SOURCE : http://www.autoweek.com/article/20090526/CARNEWS/905269989