Chinese electric car maker Tianjin Qingyuan Electric Vehicle Co is in talks with Daimler AG to develop an electric version of a van made at the German automaker's joint venture in southeast China, a source said yesterday.

Qingyuan, the first Chinese firm that has sold more than 2,000 self-made electric vehicles in the United States, is seeking to team up with big automakers, domestic and foreign, in tapping the fledgling green car business.

"Many carmakers are either investing or looking to invest in green cars currently and that presents a good business opportunity for a company like Qingyuan," the source, with direct knowledge of the matter said.

"Qingyuan not only wants to make electric cars itself but also hopes to become a major supplier of key components for big auto groups in the electric car business."

It is having discussions with Daimler to develop the electric version of a van produced at Fujian Daimler Auto targeting the China market, but nothing has been finalized, said the source.

Qingyuan is also exploring cooperative opportunities in the green car business with Beijing Hyundai, Hyundai Motor's car venture with Beijing Automotive Industry Holding Corp.

Several Chinese carmakers, including Chery Automotive, are also among Qingyuan's potential partners, said the source. Qingyuan declined to comment.

An executive at Beijing Hyundai said the firm was looking into the green car business but declined to provide name any potential partners.

Daimler said in a statement: "We continue to explore other alternative energy opportunities for China, but it is too soon to discuss any details or potential partners."

Qingyuan, based in the municipality of Tianjin near Beijing, is capable of producing 5,000 to 6,000 electric vehicles per annum. Its near-term goal is to raise its production level for key components of electric cars, including motor and driving systems, said the source.

To fund expansion, the firm is in talks with the investment arm of Lenovo Group's parent firm, among others, on a share sale, raising as much as 350 million yuan.

"The funding plan is to sell no more than 40 percent share to two or three investors," said the source, adding potential investors also included a subsidiary of China International Capital Corp, which is partly owned by Morgan Stanley, and China's top venture capital firm Shenzhen Capital Group.

Several overseas companies, including venture capital firms in the United States, have also expressed an initial interest in Qingyuan, said the source without elaborating.

Qingyuan may consider an initial public offering in China's Nasdaq-style second board, expected to be launched later this year, but no decision has been made so far, added the source.

Reuters