Chinese carmaker BYD has entered into a partnership with Toyota subsidiary Hino Motors to develop electric commercial vehicles. This is in addition to BYD’s existing deal with the top Japanese automaker to make battery-powered cars for the Chinese market.

The partnership comes as the Chinese government announced it will extend subsidies and tax exemptions for new-energy vehicles for two years amid a market contraction.

In their separate statements published on Thursday, BYD and Hino did not specify what kinds of electric commercial vehicles they will jointly build, but a Reuters report said that the partnership will focus on electric buses and trucks.

Currently, Warren Buffet-backed BYD is touting its electric buses in the overseas markets. In February, the Los Angeles Department of Transportation placed an order for 155 electric buses, of which 130 are built by BYD. At the time, the agency said that the deal was the largest single purchase of such vehicles in American history.

The partnership between BYD and Hino comes three weeks after BYD and Toyota announced a joint venture that is slated to begin in May making electric vehicles for consumers in China.

Contact reporter Ding Yi (yiding@caixin.com)

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