Daimler and BAIC have announced a new collaboration which will see the two automakers build electric vehicles in Beijing.

During a signing ceremony in Berlin, German Chancellor Angela Merkel joined Chinese Premier Li Keqiang in signing an agreement to upgrade the Beijing production facilities at the firm’s joint venture Beijing Benz Automotive Co.

In a statement, Daimler said that these upgrades and improvements will allow it to produce New Energy Vehicles locally.

“This year marks the 12th year of our close partnership with BAIC, and we have deepened our Sino-German collaboration by continuously expanding into new business areas,” said member of the board of management of Daimler AG, responsible for Greater China, Hubertus Troska.

“The framework agreement signed today marks a new chapter of our cooperation in terms of New Energy Vehicles. 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.”

News of this Chinese expansion comes shortly after Mercedes-Benz confirmed plans to produce a number of all-electric vehicles in Germany and also commenced production of a gigafactory in the country.

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