Chinese ride-hailing company Didi Chuxing plans to set up a joint venture with CHJ Automotive for the production of smart electric vehicles by 2020.
CHJ Automotive, a local automotive startup company established in 2015, generated CNY3bn (US$475m) this month in early stage fundraising led by Matrix Partners China.
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Didi Chuxing founder and CEO Cheng Wei claims his company is the world's largest operator of new energy vehicles (NEVs) with a fleet of more than 260,000 electric and hybrid vehicles. He expects this number to rise to over 1m units after 2020.
The joint venture aims to produce a range of smart electric vehicles from 2020, according to local reports.
Didi Chuxing will take a 51% stake in the joint venture with CHJ Automotive holding the remainder of the shares.
Sales of NEVs in China, comprising mainly electric vehicles, increased by over 53% to 777,000 units last year – driven by tax incentives and government organisation purchases.
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By GlobalDataThe China Association of Automobile Manufacturers expects sales of NEVs to increase to around 1m units in 2018, rising to 2m by 2020.
By 2025 it expects NEVs to account for 20% of total vehicle sales in the country.
