Mercedes-Benz and Geely have received regulatory approval to for their 50:50 joint venture that will build Smart electric cars in China.

The two companies said they would each invest 2.7 billion yuan (approximately $389 million) in the China-based enterprise to build “premium and intelligent electrified” cars under the Smart brand. The Smart Automobile Co., Ltd. joint venture will be based in the coastal city of Ningbo, located just south of Shanghai.

According to the two partners, the joint venture company will have manufacturing capacity in China and sales operations in China and Germany. As announced last year, Geely will handle the engineering part of the cars while Mercedes-Benz will be responsible for their design.

Related: Facelifted 2020 Smart EQ Fortwo And Forfour Introduce Subtle Styling And Connectivity Updates

Mercedes-Benz and Geely also announced that the joint venture will be headed by Tong Xiangbei as global chief executive. Each company will have three executives on the board of directors of the new company.

When Daimler and Geely announced their partnership in March 2019, they said the jointly-developed, next-generation Smart EVs would go on sale in 2022. That target remains unchanged, as does the vehicle development plan which includes the expansion of the Smart brand into the fast-growing B-segment.

Geely currently owns a stake of almost 9.7 percent in Daimler and operates a ride-hailing venture in China with the German carmaker.

“Having received all necessary regulatory approvals we are now ready to start the joint venture with our partner Geely that has been in preparation for the past several months. The joint venture will bring the next generation of zero-emission smart electric cars to the Chinese and global markets,” said Ola Källenius, Chairman of the Board of Management of Daimler and Mercedes-Benz.

“We will work together with Mercedes-Benz to transform the Smart brand into a leading player in urban premium, electric and connected vehicles to successfully develop the brand’s global potential,” added Geely Holding Chairman, Li Shufu.

The latest announcement regarding the Smart brand comes just over a month after China’s Great Wall Motor and Germany’s BMW formed a joint venture to build Mini-branded EVs in the world’s largest car market where demand for electric cars is on the rise.

Note: 2018 Smart Vision Fortwo Concept pictured

Mercedes And Geely Launch $780 Million ‘Smart Automobile’ EV Joint Venture In China
Mercedes And Geely Launch $780 Million ‘Smart Automobile’ EV Joint Venture In China
Mercedes And Geely Launch $780 Million ‘Smart Automobile’ EV Joint Venture In China
Mercedes And Geely Launch $780 Million ‘Smart Automobile’ EV Joint Venture In China
Mercedes And Geely Launch $780 Million ‘Smart Automobile’ EV Joint Venture In China
Mercedes And Geely Launch $780 Million ‘Smart Automobile’ EV Joint Venture In China
Mercedes And Geely Launch $780 Million ‘Smart Automobile’ EV Joint Venture In China
Mercedes And Geely Launch $780 Million ‘Smart Automobile’ EV Joint Venture In China
Mercedes And Geely Launch $780 Million ‘Smart Automobile’ EV Joint Venture In China
Mercedes And Geely Launch $780 Million ‘Smart Automobile’ EV Joint Venture In China
Mercedes And Geely Launch $780 Million ‘Smart Automobile’ EV Joint Venture In China
Mercedes And Geely Launch $780 Million ‘Smart Automobile’ EV Joint Venture In China