(Yicai Global) Dec. 4 -- Chongqing Changan Automobile plans to bring on board four government-backed investors for its new-energy vehicle arm, bringing in more than CNY2.8 billion (USD406 million) but sacrificing control of the subsidiary.

The automaker's stake in Chongqing Changan New Energy Automobile Technology will shrink to 48.95 percent from 100 percent once the deal is complete, the seller said in a statement yesterday. The backers are investment funds under the governments of Chongqing municipality and Lishui district in Jiangsu province, both areas where Changan has factories.

The new investors have already put down deposits for the stock and will complete the transaction via capital injections, the statement added.

Changan revealed its 'Shangri-La' plan in 2017 to stop selling traditionally fueled vehicles by 2025, and set up the NEV unit the following year. It also built a CNY20 billion factory in Lishui with the ability to make 240,000 cars a year in June 2018, and penned an agreement to build an NEV industrial park in Chongqing worth CNY10.2 billion and capable of making 500,000 parts a year.

The firm put a controlling stake up for sale on the Shanghai United Assets and Equity Exchange in October 2018 to bring on board new investors and spur growth, but has had no luck selling until now.

Editor: James Boynton