Volkswagen adds China's BYD as electric car ally

* Bolsters existing agreements with Sanyo, Toshiba

* BYD seen helping VW's operations in China

* MoU signed within days of Daimler buying Tesla stake

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FRANKFURT, May 25 (Reuters) - Volkswagen (VOWG.DE: Quote, Profile, Research) plans to explore the options for a partnership with China's BYD Co (1211.HK: Quote, Profile, Research) in the area of hybrids and electric vehicles powered by lithium-ion batteries, Europe's largest carmaker said on Monday.

Volkswagen is the first major industrial partner for BYD, a battery specialist and the fledgling maker of the F6DM plug-in hybrid that sold a 10 percent stake to Warren Buffett's Berkshire Hathaway (BRKa.N: Quote, Profile, Research) in September for $230 million.

"Particularly for the Chinese market, potential partners such as BYD could support us in quickly expanding our activities," Ulrich Hackenberg, head of research and development at the VW brand, said in a statement.

The deal, signed last week but announced on Monday, represents the third such partnership in the area of electric vehicles for Volkswagen, which already has signed letters of intent with Sanyo Electric Co (6764.T: Quote, Profile, Research) in May last year and Toshiba Corp (6502.T: Quote, Profile, Research) this February.