Daimler, BAIC agree to make electric cars in China

The Daimler AG sign with raindrops is pictured before the company's annual news conference in Stuttgart, Germany, February 4, 2016. REUTERS/Michaela Rehle/File Photo

BERLIN/FRANKFURT (Reuters) - Daimler and its Chinese joint venture partner BAIC Motor Corporation agreed to upgrade the Mercedes-Benz factory in Beijing to make electric cars, the German carmaker said on Thursday.

At a signing ceremony in Berlin attended by German Chancellor Angela Merkel and Chinese Premier Li Keqiang, Daimler signed a framework agreement to upgrade production facilities at Beijing Benz Automotive Co., Ltd. (BBAC), to make New Energy Vehicles, a label for so-called low-emission vehicles which include hybrid and pure battery electric cars.

“China today is already the world’s largest market for NEVs, and Daimler is committed to contributing to the further development of electric mobility in this country,” Hubertus Troska, Daimler’s board member in charge of China, said.

Daimler also agreed to acquire a minority stake in Beijing Electric Vehicle Co., Ltd. (BJEV), a subsidiary of the BAIC Group, to enhance collaboration on developing so-called new energy vehicles. Daimler declined to provide a figure for the scale or value of the stake.

BJEV was established in 2009 by the BAIC Group and other shareholders as a development platform for New Energy Vehicles.

It focuses on research and development, production, and sales and services for New Energy Vehicles and core NEV components. To date, the company’s product portfolio covers five major series of electric vehicles.

The German government's agenda to the Germany-China summit in Berlin also showed that Volkswagen VOWG_p.DE was due to sign a contract with Anhui Jianghuai Automobile Co about production, research and development of electric cars in China.

Reporting by Andreas Rinke and Edward Taylor; Editing by Maria Sheahan