(Yicai Global) Sept. 17 -- Car manufacturer Geely Holding Group has set up a new unit in central China to make electric car batteries which will likely boast South Korean design features.

Geely established Hubei Geely Hengyuan New Energy Technology through its subsidiary, with a registered capital of CNY50 million (USD7.3 million), online news outlet Cailian Press reported today. Geely's Chief Executive Xu Zhihao will serve as the chairman for the new unit.

In April last year, Geely andSouth Korea's chemical firm LG Chem came into an agreement under which the Chinese firmacquired the relatedintellectual property rightsto use all the production equipment and manufacturing technology of LG's Nanjing factory to speed up its battery product development.

The plant will be built in the Honghu Xintan Economic Cooperation Zone in the city of Jingzhou with a total investment of CNY8 billion (USD1.2 billion). The factory will be put into operation in 2020.

The production and sales volume, of which new energy products will make up 90 percent, will reach 2 million units in its first year, the Hangzhou-based carmaker said. The firm, which owns the brand of Volvo Cars, also has a goal of achieving the average fuel consumption limit of 5 liters per 100 kilometers by 2020.

Editor: Emmi Laine