By Martin Mou
SAIC Motor Corp. has initiated a new project to produce high-end electric vehicles, the latest expansion move by Chinese car makers enticed by a rosy outlook for new-energy vehicles.
SAIC, one of China's largest car makers by sales volume, said Thursday that it has teamed up with a Shanghai company and Alibaba Group Holding to run the project called Zhi Ji.
Zhi Ji will launch luxurious electric-vehicle models, SAIC said, without providing details on the timeline, pricing or sales target.
Alibaba's role is more of a technology provider for the project, a company spokeswoman said.
SAIC said it will commit 5.4 billion yuan ($821.2 million) to finance the project. State-owned Shanghai Zhangjiang Hi-Tech Park Development Co. will contribute another CNY1.8 billion.
The news sent shares of both companies soaring on Friday. SAIC's shares closed 8.5% higher at CNY27.80 after touching the daily trading cap of 10%, while those of Zhangjiang Hi-Tech Park Development jumped 10%.
Auto sales in China started to recover in the second quarter after being wrecked by the coronavirus pandemic in the first quarter. In particular, growth in the premium market and the new-energy segment have outpaced that in the mass market.
In October, sales in the high-end market rose 30% from a year earlier, while sales of new-energy vehicles, the bulk of which are electric cars, more than doubled, according to industry associations.
China has also set an ambitious target to have new-energy vehicles account for around 20% of the country's total new auto sales by 2025.
The high-end NEV market in China is set to get crowded next year, with both foreign and domestic makers expected to launch more premium models, Daiwa said.
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(END) Dow Jones Newswires