March 7, 2018 / 11:48 AM / in a year

Continental bets on 'mild hybrid' batteries in JV with China's CITC

FILE PHOTO: The logo of Continental AG, a German automotive manufacturing company specialized in tyres, brakes and car safety products is pictured on a rim at the company's stand during the Hannover Fair in Hanover, Germany, April 25, 2016. REUTERS/Wolfgang Rattay

FRANKFURT (Reuters) - Germany’s Continental AG (CONG.DE) has agreed to form a joint venture with China’s CITC Ltd to produce so-called “mild” hybrid batteries that add some electric power to existing petrol models without a costly redesign.

The new venture, in which Continental holds 60 percent with the rest owned by Sichuan Chengfei Integration Technology (CITC), will initially produce 48-volt battery systems at its headquarters in Changzhou, near Shanghai, with a view to opening a second production line in Europe at a later stage.

“Entering the 48-volt battery systems business ... will further strengthen our position as a system provider on the fast-growing mild hybrid market,” Continental Chief Executive Elmar Degenhart said in a statement on Wednesday.

Carmakers squeezed between carbon emissions restrictions and falling sales of fuel-efficient diesels are looking at affordable 48-volt hybrids as a quick fix. Parts suppliers including Valeo (VLOF.PA) and Delphi (DLPH.N) and carmakers such as PSA Group (PEUP.PA) and Daimler (DAIGn.DE) have embraced the trend.

Continental said it was still considering making high-voltage systems based on solid-state battery cells but would for now hold out for more advances to be made in the field, a spokesman said.

Domestic rival Robert Bosch [ROBG.UL], the world’s biggest automotive supplier, last month decided against producing its own high-voltage battery cells, saying investments were too risky.

CITC, through its subsidiary CALB (China Aviation Lithium Battery Co., Ltd.) will contribute its know-how in producing lithium-ion cells and enable better access to the Chinese market, according to Continental’s statement.

Continental said its 48-volt system offered functions previously reserved for more expensive high-voltage systems, such as coasting, fast engine start and recuperation of braking energy.

Reporting by Ludwig Burger; Editing by Mark Potter

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