A LITTLE-KNOWN Chinese car manufacturer has beaten the motor giants of Japan and America by launching the world’s first production plug-in hybrid car.

The BYD F3DM will be unveiled tomorrow at the preview of the North American International Auto Show in Detroit.

BYD, one of the world’s largest battery manufacturers, started making cars only in 2003. In August, founder and chairman Wang Chuanfu made the audacious claim that he expected his company to overtake Toyota as the world’s biggest motor manufacturer by 2025.

American investment guru Warren Buffett bought a 10% stake in the group in September.

The F3DM is a small four-door saloon equipped with an electric motor and a 1-litre petrol engine, both of which can drive the car.

With its batteries fully charged it can travel up to 60 miles on electricity alone. When the batteries become depleted the petrol engine takes over. And while the engine can charge the batteries, as in existing hybrids such as the Toyota Prius, the F3DM is intended to be recharged overnight by plugging into the domestic mains.

Initially, the F3DM will be sold in China's metropolitan areas starting in Shenzhen, the company’s home city. The price of 150,000 yuan (£14,400) is little more than half that of the Prius in the Chinese market. BYD expects to have several plug-in hybrid models on sale in Europe and America within three years.

The company says that the key to these products is its “iron battery”. This lithium iron-phosphate battery is related to the lithium-ion cells used in laptops and mobile phones (for which BYD is the world’s biggest supplier) but cheaper to produce, and smaller and lighter than those being adopted by other carmakers.

Toyota and Honda show their latest petrol-electric hybrids at the Detroit show this week but neither the new Prius (coming to the UK in the summer) nor the Honda Insight (on sale in March) are offered with the plug-in facility. The Japanese manufacturers remain uncertain about the safety and reliability of lithium batteries but Toyota expects to have a plug-in version of the Prius available next year.

Beleaguered General Motors will launch its plug-in electric car, the Chevrolet Volt, in 2010. Technically this is also a hybrid as it has a small auxiliary petrol engine, but that does not drive the car – it is there to charge the batteries to extend the car’s range.

BYD, according to Chuanfu, stands for “Build Your Dreams”. Established rivals are sceptical about its great ambitions but the business, which is listed on the Hong Kong stock exchange and employs 130,000 people, received a huge vote of confidence with Buffett’s investment. He paid $230m (£151m) for his stake.

This week’s Detroit show is likely to be the most downbeat for years, with the big three US carmakers – GM, Ford and Chrysler – under extreme financial pressure. GM and Chrysler have been kept in business by being given access to state loans originally intended to bail out banks.

Lawmakers have set tough conditions on granting the loans, including a demand that GM and Chrysler’s labour costs be reduced to those at Toyota’s US plants.

Rick Wagoner, chief executive of GM, said he was confident that the company would be able to secure the necessary concessions from the United Auto Workers union.

The two sides meet tomorrow to discuss changes to employment contracts. Wagoner said consideration of a merger with Chrysler had been put on hold during the restructuring talks.

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