July 6 (NBD) -- Chinese auto manufacturers Chongqing Changan Automobile Co Ltd ("Chongqing Changan", 000625.SZ) and BYD Co Ltd ("BYD", 002594.SZ) Thursday signed a strategic cooperation agreement in southern China's Shenzhen city. 

Under the terms of the agreement, the two carmakers will set up a joint venture principally engaging in the manufacture and distribution of power batteries for new-energy vehicles (NEV), and will also collaborate on vehicle electrification, intelligent and connected vehicles, as well as shared mobility.

The two companies will inject a total of 5 billion yuan (753.7 million U.S. dollars) into their new joint venture. Chongqing Changan or its related companies will own a 40 percent stake in the new entity with an investment of 2 billion yuan (301.5 million U.S. dollars), while BYD or its related companies will hold the remaining 60 percent with an input of 3 billion yuan (452.2 million U.S. dollars). 

Expected to be built in Chongqing's Liangjiang New Area, the joint venture will have a designed annual capacity of 10GWh, which will be achieved in two stages. The first-phase project will be designed with a capacity of 5-6GWh, and the second-phase will have 4-5GWh. 

BYD's Chairman and President Wang Chuanfu said that the strategic partnership marks the electric car manufacturer's first step in and great headway offering power batteries to outside companies, and is of significant influence to the company's power battery business and long-term growth. 

NBD learned that this is actually the second time that the two parties have cooperated with each other. 

In April 2018, they entered into a strategic partnership agreement pursuant to which they will collaborate on the design, match, test, and production of 3-in-1 electric drive products for new-energy vehicles that integrate electric control, electric motor and reducer. 

The signing of the new agreement Thursday is an extension of their partnership. 

BYD said in the future, the company will accelerate its pace of opening-up and partner with more vehicle manufacturers at home and abroad, so as to further boost its power battery business and cement its leadership in the niche sector.

Email: lansuying@nbd.com.cn