BYD and Mercedes parent company Daimler Group formally denied rumors about a “breakup” following a report that claimed Mercedes-Benz had switched to an alternate battery supplier because of mechanical failures from batteries produced by the Chinese manufacturer.
BYD, a rechargeable electric car battery maker established in 2003, is part of Shenzhen-based BYD Co. Ltd.
The rumor claimed Mercedes was seeking an alternate battery supplier because of problems with spontaneous combustion in BYD electric car batteries. The report also said Mercedes and American auto firm Tesla were cooperating on electric car research, setting off speculation that the German automaker might be switching suppliers. Tesla also is a major producer of batteries and motor technology.
BYD on Tuesday issued a statement of cooperation to the Shanghai Securities News, saying the report was untrue. In a press conference, a Daimler China spokesperson denied rumors of a split with BYD as a Mercedes battery supplier.
Since the May 26 incident in which a BYD-produced electric taxi exploded in Shenzhen after being struck by another car at high speed, BYD has faced a lack of confidence in the market.
Its share price declined on the first trading day after news of the explosion broke, falling from 24 yuan (US$3.8) to around 17 yuan, the largest single-day decline in the company’s history.