(Yicai Global) Dec. 18 -- Chinese electric vehicle startup CHJ Automotive plans to acquire Lifan Automobile for CNY650 million (USD94 million) and cooperate with its parent Lifan Industry (Group) to qualify to make EVs.

Chongqing-based Lifan Industry will sell its 100 percent stake in Lifan Automobile to CHJ's Chongqing unit Xinfan Mechanical Equipment for CNY650 million, Lifan Industry announced yesterday, saying that the deal will optimize the company's industrial structure and speed its transformation and industrial upgrading by concentrating advantageous resources.

Lifan Automobile earned operating income of CNY1.9 billion (USD276 million) in the first eleven months and incurred a net loss of CNY267 million (USD38.8 million), per the announcement.

Lifan Industry and CHJ will jointly develop automotive power module control technology, in-car human-computer interaction systems, tailored vehicle models for car-hailing and other emerging technologies in the smart travel sector. Lifan Industry will also participate in CHJ's next funding round, per a cooperation agreement the former also announced.

Beijing-based CHJ formed in 2015, organized by Li Xiang, who is also the founder of internet car marketing platform Autohome. CHJ had completed three rounds of financing totaling CNY5.8 billion by March.

CHJ debuted its first car model, Leading Ideal One, in October. It is projected to be delivered in next year's fourth quarter. CHJ will not adopt the traditional original equipment manufacturer pattern, because OEM cannot guarantee quality and establish a brand image, Li told Yicai Global in an interview.

Many Chinese internet car startups such as CHJ, WM Motor Technology and Byton have obtained EV production qualifications via acquisition, while Nio and Xiaopeng Motors, which have already achieved mass production, ply the OEM pattern.

Editor: Ben Armour