The coastal city of Yantai in East China's Shandong province signed an agreement with Hangzhou automaker Changjiang Auto Company on Jan 23 for a new energy vehicles project which will yield 300,000 electric commercial vehicles annually.

According to the agreement, Changjiang Auto will invest 10 billion yuan ($1.5 billion) in the Yantai Economical and Technical Development Zone to build a new energy auto base.

The base will be engaged in developing, producing and selling pure electric commercial vehicles, passenger vehicles batteries and motors.

The project is planned to be completed and put into use by the end of 2020. It is expected to produce an annual output of 60 billion yuan.

Changjiang Auto, based in Hangzhou, East China’s Zhejiang province, is the largest and most intelligent pure electric vehicle manufacturer in China. The investment will help boost Yantai's involvement in that field.

The auto sector is a major pillar for Yantai's manufacturing industry. Yantai is currently home to nearly 500 auto companies.

The Yantai Economical and Technical Development Zone has developed into the largest auto production base in Shandong province. To the end of 2018, it had produced 5,000,000 vehicles. It has developed an auto industry cluster valued at 100 billion yuan, led by Shanghai General Motors' production base and the Hyundai motor research and development center.

The fast development of the new energy vehicle industry, because of its long industrial and value chains, and high technology content, can strongly drive economic growth.

The Yantai government will step up efforts to lure more new energy vehicle projects and introduce electric auto parts companies.

It is expected to build three new energy auto projects worth 21.8 billion yuan by 2024 to produce 300,000 vehicles. The output value of the automobile industry cluster will eventually exceed 150 billion yuan.