Chinese automaker BYD Co. said Monday it had massive expansion plans this year and would consider building a plant in the United States, a day after announcing annual profits had tripled.

The company, which has the backing of American billionaire Warren Buffett, said it will put aside 10 billion yuan (1.5 billion US dollars) this year to grow its business.

Wang Chuanfu, BYD's chairman and reportedly China's richest man, told a news conference Monday the firm is on track to launch its e6 electric car in the US in the second half of the year, Dow Jones Newswires reported.

He also kept open the possibility of setting up a car plant in the United States where hard-hit automakers are struggling to recover from declining sales caused by the global downturn.

"If there is a market, we will not exclude the chance to set up a production plant in the United States," Wang was quoted as saying in a separate report.

Late Sunday, Hong Kong-listed BYD, which is 10 percent owned by a unit of Buffett's Berkshire Hathaway investment giant, said 2009 profit was 3.79 billion yuan from 1.02 billion yuan the year before, due to strong China sales.

The auto unit at BYD (Build Your Dreams) claims to be the sixth biggest car maker in China and its future plans are focused on electric or hybrid vehicles.

The firm also makes rechargeable batteries and other mobile phone components -- although it said battery sales dropped about 34 percent last year due to the "sluggish" handset market.

Wang told the news conference that he expects more than 60 percent of 2010 revenue to come from vehicle sales, up from 53 percent in 2009.

Two weeks ago, BYD and German auto giant Daimler announced they had struck a preliminary agreement to mass produce an electric car together.

The pair said the vehicle would be made under a new jointly owned brand for China's fast expanding urban market.

Some analysts, however, are sceptical about the short term prospects of alternative energy automobiles due to limits on the range of purely battery powered vehicles, their cost, and the lack of a network of power stations.

BYD's Hong Kong shares were up one percent in afternoon trade at 69.6 Hong Kong dollars.

The German automaker Daimler said late Monday it had agreed to develop an electric car for the Chinese market with the Chinese group Build Your Dreams (BYD).

"Under the agreement, Daimler and BYD intend to develop a new electric vehicle specific to the requirements of the Chinese market," a joint statement said.

A new brand would be created for the vehicle and the construction of a Chinese technology centre was included in the deal, it added.

Daimler is to bring its expertise in electric cars to the venture, while BYD would add its battery technology to the company.

"Electric vehicles are especially well-suited for urban driving. With its many metropolitan areas, China has the potential to be among the world?s largest markets for zero-emission vehicles," the statement quoted Daimler chairman Dieter Zetsche and BYD chairman Wang Chuanfu as saying.

Daimler is relatively new to the field of low-emissions vehicles, but the maker of Mercedes Benz is trying to catch up with the launch this year of electric versons of its Smart city car and small Class A series.

In late 2010, BYD plans to introduce its e6 electric vehicle in North America.

US billionaire Warren Buffett owns 10 percent of BYD.

From its headquarters in south China, BYD Auto is pursuing a project of staggering ambition: To be in the lead as the world's cars free themselves from their century-old dependence on petrol.

The company, which was founded just 14 years ago and found success making batteries, has unveiled a series of slick electric and plug-in hybrids as it prepares to enter the US and European markets in 2011.

"In the next five to 10 years we will see big changes. Electrification will happen much sooner than people expect," said Henry Z. Li, BYD's soft-spoken general manager for auto exports, in an interview.

Whether he is right has implications not just for those who have put money in the company -- such as celebrity investor Warren Buffett -- but for the planet, with China now the top greenhouse gas emitter according to some counts.

The vision at BYD, or Build Your Dreams, is that of a future where electric cars fill the roads and quick-charge stations are as readily available as petrol stations today.

This dream remains a long way off, with big cost and technological barriers ahead.

Only next month will it start delivering the F3DM -- DM stands for "dual mode" -- which can go 100 kilometres (63 miles) on its battery, or 580 kilometres (360 miles) in hybrid mode with gasoline.

The model's initial appeal will be to corporate clients that can afford to buy a small fleet of hybrids and set up special facilities for recharging.

For the private Chinese consumer, the case for a hybrid is less obvious, and in order for this market to take off, it is important to build up a critical mass of vehicles that makes charging stations commercially viable.

BYD is in talks with utilities such as State Grid Corporation of China, and they are "interested", said Li, 40.

"It's a positive cycle. More electric cars, more charging stations. It's no use asking which comes first, the chicken or the egg. We have to put something out there first," he said.

It may seem like a huge leap to go from carving out a niche in China's embryonic market to aggressively expanding abroad and taking on the likes of General Motors, Chrysler and Ford, which also are exploring electric vehicles.

Some rivals duly voiced skepticism after BYD Chairman Wang Chuanfu told participants at last month's auto show in Detroit that he planned to kick off sales in the United States and Europe in just two years.

The company's relative lack of experience, having been in the auto business only since 2003, may be a disadvantage but its unique history could nevertheless put it in pole position, argued Jia Xinguang, an independent auto researcher based in Beijing.

"BYD has experience in making batteries. It's number two in the world for rechargeable batteries. It's got a technological advantage," he said.

Other companies have tried electric cars before -- and failed. But times have changed, observers said.

"The technology has advanced significantly since the electric vehicles of the 1990s," said John Patten, an expert on alternative fuel cars at Western Michigan University.

"The political climate is also much more receptive, and is in fact pushing this type of technology, which is environmentally beneficial, so people and politicians don't have to be sold on the benefits."

This goes for China too, where BYD just got a boost from the government in the form of a policy package to help the auto industry through the global economic crisis.

While details are still pending, the company is likely to benefit from a subsidy for clean vehicles, which could cut the 150,000-yuan (21,900-dollar) price tag for the F3DM, which is almost double the petrol-powered equivalent.

"It's difficult for people to accept this high premium. That's why government incentives are important," said Li.

The company got a different boost in September when Buffett's MidAmerican Energy Holdings said it had agreed to buy 10 percent in BYD Co., the parent of BYD Auto.

"It was a signal to the public that Warren Buffett recognised the battery technology and our future directions. He's a long-term investor," said Li.

Until recently, BYD was operating against the backdrop of rapidly rising crude prices. Now oil is plunging, but the company sees it as only a minor bump in the road.

"In the short term perhaps oil prices are up and down, but in the mid-term, long-term it has to go up, because it's a limited resource. We're looking more long-term, not just one to two years," said Li.