(Yicai Global) Dec. 28 -- Guangzhou Automobile Group Co. and one of its units will partner up with Shanghai-based auto startup NIO and a Hubei development fund to research, sell and service connected new-energy vehicles through a joint venture.
The new firm will have a total investment of CNY1.28 billion (USD196 million) and registered capital of CNY500 million, funded in instalments.
GAC Group and GAC New Energy Automobile Co. will each contribute CNY45 billion to the first payment, worth CN200 million, for 22.5-percent stakes in the new venture. NIO and Hubei Changjiang NIO New Energy Industrial Development Fund Partnership will hold the remainder.
There have been a number of recent cases in which new-energy car companies have partnered traditional auto makers. NIO has also recently teamed up with Changan Automobile Co. to develop NEVs, though not at the same level as its partnership with GAC. Some analysts have speculated that the latest deal is a result of NIO and GAC both being partnered with internet behemoth Tencent Holdings Ltd.
Tencent partnered with GAC to premiere the iSPACE electric car and unveil a joint brand strategy at the recent Guangzhou Auto Show. The internet firm has also backed NIO on several occasions. It led a USD1-billion round in October this year its Chairman Pony Ma has individually invested in the company.