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Mercedes has decided to exit their joint venture with the Chinese EV giant BYD. It has sold the 10 per cent stake that they had in the venture. This exit comes 3 years after the German giant had unloaded the majority of its stake of the venture in 2021. BYD will now be solely responsible for handling the venture.
What Was The Venture?
Denza, the brand made by a venture between BYD and Mercedes, was developing and producing luxury electric vehicles for the Chinese market. It came into existence in 2010 as a 50-50 venture between Daimler and BYD. BYD was responsible for providing the battery tech and EV expertise in this venture while Daimler would bring in their experience with engineering and luxury. Its first model was the Denza 300 that made it to the markets in September 2014. Its sales were capped below 3,000 models from 2015 to 2018. BYD bought 40 per cent of Mercedes’ share in the venture back in 2021. The reason behind that is believed to be its dwindling sales. Mercedes has said that its technology did not get incorporated in the Denza models.
Mercedes’ China Stance
Mercedes, like other German automakers, has a peculiar situation in China.This is caused by the multiple tariffs being implemented by different countries on China made cars. The European Union is planning to implement a 36.3 percent tax on the cars that are made in China. Other than that, Canada has also added a 100 per cent import tax on Chinese EVs. That being said, Mercedes recently announced that it will invest Rs 16.5 thousand crores ( RMB 14 billion) in China with local partners to diversify its localised portfolio.
BYD Enjoying Highs
BYD has become a force to reckon with all across the globe when it comes to EVs. It leads in electric vehicle sales not only in its home market, but also across the world markets. It has alliances with multiple big brands and accounted for 33.4% sales in China in the first 7 months of 2024. It is also expanding its luxury portfolio with models like the Denza Z9GT. It targets a sale of 500,000 vehicles outside China by the end of this year and want to hit the million mark in 2025.
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