Anhui Jianghuai Automobile Co. (JAC) and Tianjin-based HKMC Equity Investment Fund Management Co., a wholly-owned subsidiary of Hong Kong's Hybrid Kinetic Motors Corporation (HKMC), signed a letter of intent on August 4th for a 2 billion yuan (US$ 295 million) joint venture deal on new energy vehicles, JAC said in a statement today.

China's media says the new joint venture is likely to be located in Hefei city, eastern China's Anhui province. The two sides are now waiting for the Chinese government's approval to sign a formal agreement or contract.

JAC needs to further discuss with HKMC (Tianjin) on the registered capital and total investment of the joint venture. The two sides did not reveal the specific products to be produced in the JV, meida reported.

Yang Rong, former chairman of Brilliance China, established the Tianjin company through its Hong Kong Listed Co. (HKMC) , on January 26th this year, with a total investment of US$ 2.8 million as well as a registered capital of US$ 2 million.

Yang Rong, also the founder of Hybrid Kinetic Motors, a new start-up carmaker in the U.S., acquired Zhejiang Jia Beisi Green Energy Co., a manufacturer of lithium electronics- powered battery, in east China's Zhejiang province, for 180 million yuan (US$ 26 million) on May 5th, 2010.

Yang Rong expected to expand GBS Energy's production capacity and use Jia Beisi's assembly line to produce higher-end power batteries tailoring for the hybrid vehicles.

The partnership with JAC is HKMC (Tianjin)'s first cooperation, as a seperate company, with a domestic vehicle manufacturer since its founding in January.