Daimler AG plans to launch production of a small battery-powered SUV in China under its Smart brand from 2022, according to local reports citing a senior executive at the company.

Smart, better known for its two-seater micro-cars, plans to enter the Chinese market with a "spacious yet compact, fully electric SUV", according to Daniel Lescow – vice-president of global sales, marketing and aftersales of Smart Automobile Co Ltd.

Smart Automobile Co Ltd is a joint venture between Daimler AG and Zhejiang Geely Holding Group, established in January 2020 and capitalized at CNY5.4bn (US$835m). It is headquartered in Ningbo city in Zhejiang province, with sales operations in both China and Germany.

A new plant is being built in Ningdo to produce a new generation of smart vehicles for global markets, including Europe. Mercedes-Benz Design worldwide network is in charge of design while Geely's global engineering network is responsible for engineering and development, according to a statement by Daimler.

The new battery-powered SUV will be based on Geely's latest SEA electric vehicle platform, which it will share with other brands within the Chinese group includingthe premium Lynk& Co brand.

Daimler's Hambach plant in France, which currently makes Daimler's Smart cars, will be retooled to produce Mercedes-Benz-branded electric vehicles after Smart car production is transferred to the Chinese plant.

Zhejiang Geely Holding Group acquired a 9.69% stake in Daimler AG in 2018, becoming one of the German automaker's largest shareholders.