EnerDel joined the parade of U.S. and European electric-vehicle companies striking deals with Chinese competitors, announcing on Thursday that the company had entered into a joint venture with Chinese auto parts supplier Wanxiang.

The two companies will jointly manufacture lithium ion batteries with an eye on selling to the explosive Chinese car market, now the world's largest.

The deal is the most recent in a string of joint ventures and announcements highlighting a growing symbiotic relationship between the two countries when it comes to electric cars. Several companies want to market all-electric cars in the U.S. and Europe and want to take advantage of China's vast manufacturing infrastructure. At the same time, Chinese technologies and manufacturing standards trail those in the West and Japan by as much as a decade. U.S. manufacturers thus can bring quality control and marketing know-how to the table, while the Chinese can bring Texas-sized factories and supply chains to match.

Earlier this week, CODA of Santa Monica said that Lio Energy Systems, a joint venture between Coda and Chinese company Lishen Power Battery, will try to erect a plant in Ohio. Coda's all-electric car, coming later this year, is based around a gas-burning car sold in China right now, but it has also been heavily modified by U.S. engineers. The Lio battery will be used in the car.

In a slightly ironic twist, these Sino-U.S. ventures could end up getting financial support from both governments. Lio receives financing from state-owned Chinese banks and is currently applying for DOE loans. Coda member John Bryson, during a conference at UC Berkeley earlier this year, said the Chinese government would put around $500 million into Lio. It could be the first time foreclosure requires a treaty. Meanwhile, EnerDel landed ARRA grants last year.

PowerGenix, which makes nickel zinc batteries, recently hired Dr. Xu Gang, who oversaw many development programs at Lishen. Mission Motors, the electric motorcycle designer, is lining up Chinese partners. Meanwhile, Germany's Daimler AG just launched an $88 million joint venture with Chinese battery maker turned car developer BYD to build an electric car for the Chinese market.

"Our new joint venture is well positioned to make the most of the vast potential of electric mobility in China," said Dieter Zetsche, Damiler's chairman.

My colleague Mike Kanellos adds secretive Sino EV for good measure: it's a Silicon Valley company that hopes to make batteries for Chinese cars.

EnerDel, the battery-making arm of Ener1, said it expects its joint venture to produce 20,000 battery packs annually by year's end and 40,000 by the end of 2011. The capacity will greatly expand production at the Indianapolis company, which now makes 20,000 battery packs at a facility in Korea and anticipates an additional 30,000 at a soon-to-open Indianapolis plant. A second Indianapolis facility operates at a comparatively modest level.

This move does more than raise the company's global capacity, according to a spokesperson. It gives EnerDel access to the high-priority Chinese market. The company did not say what it will invest in the joint venture.

Wanxiang, China's largest auto-parts supplier, is the majority stakeholder in domestic carmaker Guangzhou Automobile and has supply relationships with vehicle makers SAIC, Chana, Haima and Yutong -- all of which are potential battery customers.

Daimler says its alliance is designed to combine its expertise in electric cars with BYD's command of battery technology and drive systems. BYD has 3,000 engineers working in Shanghai, with plans to hire more.

The new vehicle will be marketed under a yet-unannounced brand. BYD, which counts Warren Buffett among its backers, has already built two electric cars: the hybrid F3DM and the soon-to-be-released e6.

Coda says it is scouting sites for its plant. It also will apply for a manufacturing loan from the Energy Department. The company's joint venture produces 20,000 battery packs a year in China, but will close the facility when the Ohio operations begin.


Michael Kanellos contributed to this report.