(Yicai Global) Nov. 26 -- State-backed automaker SAIC Motor will invest CNY5.4 billion (USD821 million) to set up an investment fund and build a high-end electric vehicle project with e-commerce giant Alibaba Group Holding.

SAIC Motor will establish a CNY7.2 billion investment fund with Shanghai Zhangjiang Hi-Tech Park Development, with the former investing CNY5.4 billion and the latter CNY1.8 billion, the Shanghai-based company said in a statement today. 

The fund will work with Alibaba to develop the project. Called Zhiji Auto, the project will focus on high-end, pure electric vehicles and will use Alibaba's technological advantages in the field of artificial intelligence and Big Data. SAIC Motor will be responsible for the on-site production, it said.

The statement did not disclose the investment amount or shareholding ratio. Zhiji Auto secured over CNY10 billion in a recent round of financing, with SAIC Motor’s stake accounting for 54 percent, Zhangjiang Hi-Tech 18 percent, Alibaba 18 percent, and others 10 percent, The Paper reported. 

Zhiji Auto is expected to make appearances next year at auto shows in Shanghai and London and at the Consumer Electronics Show in Las Vegas, and it will introduce a sedan and a sport utility vehicle, according to The Paper.

SAIC Motor and Alibaba started cooperating on smart cars in 2015, and jointly founded an Internet of Vehicles technology firm called Banma Network. 

Auto stocks fell sharply today. Shares in SAIC Motor [SHA:600104] closed down 4.7 percent at CNY24.95 (USD3.8), giving the firm a market value of CNY291.5 billion.

Editors: Tom Litting