China's Geely Automobile Holdings on Tuesday announced a joint venture with its parent group for electric vehicles and a new brand called Zeekr.
The company also said 2020 net profit fell 32 percent to 5.53 billion yuan ($849.54 million), as auto sales in the world's biggest market were hit by the COVID-19 pandemic.
Geely is the highest-profile Chinese automaker in the world due to its investments in Volvo Cars and Daimler.
The automaker sold 1.32 million cars last year, down from 1.36 million units in 2019. It expects to sell 1.53 million cars this year.
Overall auto sales in China fell 1.9 percent to 25.3 million vehicles in 2020, according to industry data.
Geely Automobile and its parent, Zhejiang Geely Holding Group, will invest $5 billion in a new electric-car battery plant, and launching Zeekr.
The first Zeekr vehicles are expected to be delivered in the third quarter of 2021, Geely said in a statement.
Geely sold about 68,000 new energy vehicles last year, or around 5 percent of its total. That is well short of a goal set in 2015 to have 90 percent of sales consist of EVs by 2020. Rival BYD by contrast got 44 percent of its sales from EVs last year.
Its announcement confirms reports earlier this month that Geely Chairman Li Shufu was planning a new electric-car brand in a bid take on EV leader Tesla.
Other automakers have used a new brand to launch their EV units. Geely's rivals including Great Wall, and SAIC Motor have rolled out new standalone EV brands.
Geely Holding also aims to become a leading EV contract manufacturer and engineering service provider.
Geely Automobile and Volvo Cars last month abandoned their merger plans but launched a new entity to combine their powertrain operations and expand cooperation on electric vehicles.
Bloomberg contributed to this report