Audi is negotiating a deal with BYD to supply battery packs for its electric vehicles amid shortages that have reportedly caused the German car maker to slow down the production of the E-Tron SUV.
Citing sources familiar with the matter, Bloomberg reports that talks between Audi and the Chinese company are in an advanced stage, exploring options for a deeper cooperation that may include a new joint venture or the former buying a stake in BYD’s battery unit.
The same sources note that BYD is in discussions with other car makers as well about a potential battery supply deal and that there’s no guarantee that an agreement with Audi will eventually be reached.
If the two companies shake hands, the Chinese are expected to supply the battery packs for the electric models that are based on VW Group’s Premium Platform Electric (PPE) architecture, such as the upcoming Porsche Taycan and the production version of the Audi E-Tron GT.
The VW Group is reportedly dealing with battery supply issues with Samsung SDI in Europe, after pledged supplies fell to less than 5 gigawatt hours from just over 20. As a result, Audi had to revise its plan for the E-Tron SUV, reducing production numbers at its Brussels factory due to the battery shortage.
This deal could also prove beneficial for BYD as it will help them take on bigger rival CATL, which already supplies Audi with batteries for its China-only Q2L e-tron small SUV. BYD is China’s top car maker of the local New Energy Vehicles and has a joint venture with Daimler for the local Denza EV brand.