US batterymaker A123 will develop a battery pack for a new electric vehicle from China's Shanghai Automotive Industry Corp (SAIC).

The two companies said A123 will provide a customized battery pack to Advanced Traction Battery Systems, a joint venture between A123 and SAIC. The pack wil be used to power a new electric vehicle that SAIC plans to launch in 2012.

A123 already supplies batteries for other electric drivetrains SAIC is developing. These projects include the Roewe 750 hybrid-electric sedan and the Roewe 550 plug-in hybrid electric model.

The Chinese government has set a goal of producing 1 million electric vehicles a year by 2020. Several Chinese manufacturers are planning electric vehicles and the country is expected to take the global lead in producing the new cars.

Said Jun Zhu, general manager of SAIC's New Energy Vehicle division: "We remain committed to producing a complete line of automobiles to support the government's new energy vehicle initiative and we expect to continue to expand our partnership with A123 and ATBS as key suppliers for current and future programs."

A123, which is headquartered in the US state of Massachusetts, develops and produces nanophosphate lithium ion batteries and systems.