Last year, the two companies formed a 50-50 joint R&D venture called "Shenzhen BYD Daimler New Technology Co. Ltd" or "BDNT" for short, to create a new brand that will focus on the development of pure electric vehicles for China.

With a billionaire like Warren Buffett backing you up and forming a partnership with none other than Daimler AG is supposedly a recipe for success. Yet Chinese automaker BYD reported a 89% drop in profits in the first half of the year compared to the same period in 2010.

BYD’s sales in the first six months of 2011 were down 23.4%, to 220,131 units. Deliveries of the core models of its range, such as the F0 city car, the F3 compact and the F6 mid-sized sedan plunged right after the governments incentives for new car buyers stopped at the end of last year.