Chinese internet giant Baidu said it had agreed with local automaker Zhejiang Geely Holding to establish a strategic partnership to develop and produce smart electric vehicles (EVs).

The two companies plan to establish a new car making joint venture with Geely providing its automotive design and manufacturing expertise while Baidu will contribute advanced driving technology.

Robin Li, co-founder and CEO of Baidu, said in a statement "we have long believed in the future of intelligent driving and over the past decade we have invested heavily in artificial intelligence (AI) to build a portfolio of world class self driving services. China has become the world's largest EV market and we seeing EV consumers demanding next generation vehicles be more intelligent".

Geely is a leading domestic passenger vehicle manufacturer in China with sales of its Geely and Lynk & Co brand vehicles down by just 3% at 1.32m units in 2020.

The company also has a majority stake in Volvo Cars and holds just under half of the shares in Malaysian national carmaker Proton Holdings.

Li added "as a top Chinese automaker with global reach, Geely has the unique experience and resources to design, produce and market energy efficient, reliable and safe automobiles on a large scale. We believe that by combining Baidu's expertise in smart transportation, connected vehicles and autonomous driving with Geely's expertise as a leading automobile and EV manufacturer, our new partnership will lead the way for future passenger vehicles".