TAIPEI – Pihsiang Machinery Mfg. Co Ltd, Taiwan's largest manufacturer of lithium-ion batteries for electric vehicles, and Shanghai Automotive Industry Corp. have agreed to cooperate in the production of electric vehicles, the Chinese-language Economic Daily News says.

Under the terms of the agreement, Pihsiang will supply SAIC with key EV modules and Li-ion batteries.

Pihsiang and SAIC still are negotiating what form the cooperation will take. One possibility calls for setting up an EV factory in China with Pihsiang supplying the technology while SAIC provides capitalization.

Meanwhile, Pihsiang announces it will establish an assembly line at a 12-acre (5-ha) site leased from Suao Harbor. The terms of the lease call for Pihsiang to pay the harbor a yearly maintenance fee of $335,000 plus 1% of net after-tax income.

The new plant is expected to create about 200 jobs when it comes on line early next year.