Daimler has signed a memorandum of understanding (MoU) that will see it enter into a technology partnership for the development of electric vehicles for China.

The deal, with BYD Company, will see a vehicle marketed under a new brand jointly created and owned by Daimler and BYD. In addition, a common technology centre will be established in China to develop, design and test this electric vehicle.

"With this announcement, we continue to push ahead as a global leader in electric mobility. Daimler's know-how in electric vehicle architecture and BYD's excellence in battery technology and e-drive systems are a perfect match. Thus, we will be able to participate in the potential growth of electric mobility in China, currently the largest auto market of the world", said Daimler chairman Dieter Zetsche, who also heads Mercedes-Benz Cars.

"With this technology partnership, we have created a win-win business model with complimentary competences. We are very excited about this opportunity to work together with Daimler, the inventor of the automobile", said BYD chairman and president Wang Chuanfu.

BYD, in which legendary US investor Warren Buffett has a stake, claims to be China's leading manufacturer in developing advanced battery technologyand the sixth biggest car maker in China. The company launched its E6 people carrier in Europe at the Geneva motor show today and plans to sell the car in Europe by 2011.

The companies' MoU also includes further discussions on additional business opportunities of mutual interests, a statement said.