Nothing much good has been happening to Chinese battery and auto producer BYD Co recently. Its latest earnings, released this week, were down sharply as sales for its gasoline-fueled cars in China took a nosedive. It has also delayed a much-hyped launch in California of one of its all-electric battery cars. And, earlier this month, China’s central government ordered the company to surrender land in a zoning dispute, a decision that is likely to stunt its growth.

But there has been one bright spot for the automaker this year: Daimler AG’s decision to tie up with BYD to create a new electric-car joint venture for the Chinese market.

In late September Bill Gates and Warren Buffett came to BYD’s headquarters in Shenzhen to, among other activities, visit a studio where designers from Daimler and BYD are working together to develop their first electric car, according to individuals close to the new joint venture. Mid American Energy Holdings Co., a unit of Mr. Buffett’s Berkshire Hathaway Inc., owns 10% of BYD.

Last week Daimler Chief Executive Dieter Zetsche said in Shanghai the German auto maker’s newly formed electric-car joint venture with BYD is progressing “according to plan.” He said their effort to develop a new electric battery car for the Chinese market is nearing its so-called styling freeze, which refers to a stage in the car-development process where engineering and styling specifications are set firmly.

According to the individuals, a relatively small group of Daimler engineers and designers, now holed up at BYD’s headquarters in the southern China industrial city of Shenzhen, are busy working overtime side-by-side with their counterparts from BYD to finish the car by the end of 2012 or early 2013. The car is part of a broader effort by Daimler and BYD to develop a joint electric-vehicle brand for China.

The styling of the new BYD-Daimler electric car has gone through many iterations, with an array of ideas proposed mostly by automotive stylists from Daimler’s Mercedes-Benz unit, according to the individuals.

They say the final exterior execution of the new battery car isn’t likely to be radically futuristic, even though some people at Daimler were hoping for that. Even though Mercedes-Benz designers proposed more edgy styling ideas, BYD management, worried about keeping the car’s looks more mainstream — and thus non-offensive to average consumers — have pushed for a more conservative look, the individuals said.

One of the individuals who has seen the new car says it looks like “half sedan and half crossover.” He said the vehicle had to become taller to accommodate the beefy lithium-ion battery pack it has to accommodate.