With Audi as a customer, BYD probably will need to step up its investments in battery production capacity again.

According to Bloomberg's unofficial sources, Audi (part of the Volkswagen Group) is in talks with Chinese BYD about lithium-ion battery supply for new models.

Adding BYD to the list of suppliers would be important from the diversification perspective, especially in China, where the new Audi Q2 L e-tron BEV is using CATL cells.

The purpose of the deal is reportedly for the upcoming Premium Platform Electric (PPE) platform, under development by Audi and Porsche, for multiple models in high-volume B through D segments from 2021 on.

According to the article, the talks were including exploration of other areas like joint developments, joint venture company or acquisition of a stake in BYD.

BYD is gradually expanding its list of automotive partners, which already includes Daimler (for the Denza brand) and recently also Toyota.

In late 2018, BYD hinted an intention of IPO for its battery unit by 2022, which by the time might operate plants with a total capacity of lithium-ion cells in the three-digit GWh per year range.

Source: Bloomberg