Chinese automaker Zhejiang Geely Holding Group (Geely) has built up a minority stake in Daimler, according to Chinese media, citing a Reuters report.

Geely already controls Volvo Cars and the UKs London taxi manufacturer LECV, plus has significant stakes in Malaysia’s Proton and Lotus Cars.

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It is also understood to have a minority stake in Volvo Trucks.

The latest reports, citing sources close to the company, suggest Geely had acquired existing shares in Daimler and would like to push through an alliance with Mercedes-Benz in electric vehicle (EV) technology.

The Chinese company is said to be particularly interested in Mercedes-Benz’s in-house EV battery technology. 

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The stake acquired by Geely is clearly below 3% because a holding of this size or larger would need to be disclosed to German regulators.

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The reports also suggested Geely last year had asked Daimler to sell it a 5% stake in the company through a discounted share placement but that Daimler was not keen to dilute its current shareholding structure.

Daimler already has an alliance in China with BAIC group and fears a second Chinese alliance would create complications with its existing partner. Last year Audi’s proposed partnership with SAIC created complications with its long standing partner FAW group.

The reports suggest that Geely continues to build up a stake in the German automaker by buying existing shares on the open market.

The two companies denied any knowledge of these developments.

The Chinese EV market is set for rapid growth in the coming years as the government looks to introduce minimum sales quotas for new energy vehicles from next year. Carmakers in China are thus under significant pressure to ramp up production of EVs and related components.