FRANKFURT -- Continental has agreed to form a joint venture with China's CITC to produce so-called "mild" hybrid batteries that add some electric power to existing gasoline 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 CEO Elmar Degenhart said in a statement on Wednesday.
Automakers 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 and Delphi and automakers such as PSA Group and Daimler 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, 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) 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.