Chinese home appliance giant Midea Group and Chinese new energy vehicle startup Nio have joined hands in several fields, including electric car parts.

Midea and Nio held a signing ceremony yesterday in which they reached a deal to jointly develop electric vehicle parts, such as air conditioning compressors, electric drives, thermal management integration, and on-board refrigerators, the pair announced in a joint statement yesterday.

Fan Hongbo, chairman and president of Midea, and William Li, founder, chairman, and chief executive officer of Nio, participated in the signing ceremony yesterday. They both expressed their desire for Nio cars to be equipped with auto parts made by Midea's plant in Anqing, China's eastern Anhui province.

The first phase of Midea's NEV parts production base in Anqing came on stream in January last year. When fully operational, the plant will have an annual production capacity of 60 million sets and annual output value of CNY40 billion (USD5.5 billion).

Moreover, Midea and Nio will collaborate on industrial robots, auto and general industrial automation solutions, digital management systems, and intelligent logistics to enhance the intelligent manufacturing level of the NEV industry.

New energy is one of Midea's main business focuses. Fang Hongbo said during last year's shareholders' meeting that the company's NEV parts and energy storage business has tremendous development potential in the foreseeable future.

Midea had an annual production capacity of 750,000 automotive grade thermal management products, electric drive systems and chassis actuation systems last year, up 400% from a year earlier, with its automotive electric compressors covering all models of multiple mainstream carmakers.

Midea's shares [SHE: 000333] were trading up 0.1 percent at CNY65.20 (USD9.01) as of lunch break in Shenzhen today. Nio [HKG: 9866] fell 3.1 percent to HKD36.05 (USD4.60) as of 12.00 p.m. in Hong Kong. Its New York-listed stock [NYSE: NIO] closed 2.6 percent down at USD4.59 yesterday.