BMW Group and the biggest Chinese SUV brand, Great Wall Motor, announced a partnership Tuesday to produce electric MINI vehicles in China as global automakers ramp up development under pressure from Beijing.
The companies said they signed an agreement Monday during an event in Berlin attended by Chinese Premier Li Keqiang and German Chancellor Angela Merkel.
BMW and Great Wall said their venture, Spotlight Automotive Limited, also will make electrics for the Chinese partner's brand. Great Wall put total investment in the venture at 5.1 billion yuan (US$770 million) and said it is aiming for annual production of 160,000 vehicles.
Automakers are pouring billions of dollars into creating electric models for China, the biggest market for the technology.
Beijing is using access to its market as leverage to induce global automakers to help Chinese brands develop battery and other technology.
Auto brands in China are required to make electric vehicles at least 10 per cent of their sales starting next year or buy credits from competitors that exceed their quotas. Later, they face pressure to raise those sales in order to satisfy fuel efficiency requirements that increase annually.
Sales of pure-electric passenger vehicles in China rose 82 per cent last year to 468,000, according to an industry group, the China Association of Automobile Manufacturers. That was more than double the US level of just under 200,000.
Other automakers including General Motors Company, Volkswagen AG and Nissan Motor Co have announced similar plans with Chinese partners to produce dozens of electric models.
Great Wall, headquartered in Baoding, southwest of Beijing, sells more than one million SUVs a year.
"With our joint approach, we can quickly scale up production and increase efficiency," said Klaus Frolich, a BMW board member, in a statement.
MINI's first battery electric model is due to be produced at its main British factory in Oxford in 2019, according to BMW.
China is BMW's biggest market. The Munich-based automaker said about 560,000 BMW brand vehicles were delivered to Chinese customers in 2017, more than its next two markets - the US and Germany - combined.
China was MINI's fourth-largest market in 2017, with 35,000 vehicles delivered, the company said.
The electrics venture with BMW is an important boost for Great Wall, which industry analysts warned would struggle to satisfy Beijing's sales quotas due to its fuel-guzzling vehicle line-up and had yet to announce any significant electric plans.