China's Beijing Automotive Group Company this week signed an agreement with Beijing Shunyi district authorities for the construction of new facilities for the production of Mercedes-Benz new energy vehicles from next year.

Beijing Automotive Group Company has a joint venture with Mercedes-Benz, called Beijing Benz Automotive Company, which will operate the new plant.

A total of CNY11.9bn (US$1.88bn) will be spent on the new facilities and upgrades to existing facilities, which will be built at BAIC's existing production site in Shunyi district.

The new investment will create the capacity to produce an initial 150,000 electric vehicles per year, worth CNY50bn, with production scheduled to start at the end of 2019. Capacity will be expanded to 300,000 vehicles at a later stage based on demand.

The company said the production line woulkd be 90% automated and the plant would feature a new advanced logistical systems including an intelligent, highly automated component distribution system.