ZF Friedrichshafen and Chinaâ€™s Beijing Automotive Industry Corp (BAIC) plan to jointly produce components for electric vehicles in China.
The agreement reflects expectations that EVs will soon play an even bigger role in the worldâ€™s largest car market as the government moves to curb air pollution in major cities.
â€œChina is the largest and most dynamic market for electromobility and is playing a key role in the rapid spread of this promising drive technology,â€ ZF Production Director Michael Hankel said in a statement.
ZF and Chinese carmaker BAIC have already been working together in China for the past three years.
The German automotive supplier and BAIC subsidiary BHAP signed the new agreement during the Frankfurt Auto Show last week.