Daimler is in talks with a joint venture partner to produce battery powered versions of its two seat, Smart ForTwo car in China, according to local reports quoting industry insiders.

Producing battery powered Smart cars would help it meet China's new energy vehicle quotas which come into force at the beginning of next year. 

Electric vehicles in China already enjoy generous tax incentives and privileged access to parking in the main cities. From next year, a minimum new energy vehicle sales quota of 10% will be enforced on all major automakers in the country.

Daimler is said to be in talks to set up a new joint venture with Beijing Electric Vehicle Company (BJEV), a subsidiary of state owned Beijing Automotive Industry Holding (BAIC Group).

The German automaker has been in partnership with BAIC Group for 13 years, a throwback to the DaimlerChrysler days and the Beijing Jeep partnership. 

Daimler already has a 4% stake in BJEV, which it acquired in March, and this partnership looks to become a key part of its overall powertrain electrification strategy in China.

Daimler also has an electric vehicle partnership with China's BYD Company to make battery powered cars under the Denza brand.

Daimler is also looking to switch its Smart cars to battery power on a global basis and China will likely be pivotal in taking forward this strategy.

Auto market intelligence
from just-auto

• Auto component fitment forecasts
• OEM & tier 1 profiles & factory finder
• Analysis of 30+ auto technologies & more