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June 5 (NBD) -- China's electric car maker BYD Company Limited (002594.SZ) is expected to spin off its battery unit, in response to a market which sees sliding subsidies for new energy vehicles (NEVs) and an increasing number of NEV manufacturers.

As one of the biggest gainer from NEV subsidy policies, BYD now is entering to a period of adjustment due to subsidy reduction. Its rising sales of NEVs couldn't offset the impact from the cut in subsidy.

Yungui and battery business constitute two major breaking points to lift up the company's performance.

BYD's Yungui, a cloud rail system, is capable of making the trains, laying the rail, constructing stations and setting up the communication system on its own.

But with the profit model of Yungui remains to be seen, BYD seems more likely to focus on the future development of its battery business.

Instead of providing battery exclusively to its own NEVs, BYD has been trying to sell batteries to other carmakers. The company's lithium-ion battery production base in northeast China's Qingdao is to be put into operation, which will help support BYD's battery supply to other NEV manufacturers.

Email: gaohan@nbd.com.cn