Beiqi Foton Motor announced that it will form a joint venture which aims to be the nation's biggest producer of vehicle lithium battery, media reported today.

The commercial vehicle maker said it plans to invest 10 million yuan ($1.47 million) for a 10% stake in the new company that produces batteries for new energy vehicles, according to its statement to the Shanghai Stock Exchange.

The vehicle battery technology company is co-founded by Foton Motor, its parent Beijing Auto (BAIC), Pulead Technology Industry Co and a Dongguan-based technology firm. The new company, aiming to be China's largest lithium battery producer, will work on the design, R&D, manufacture and distribution of power cells.

Foton said it would devote more effort to new-energy vehicles and use the cutting-edge battery technology in making its new-energy commercial vehicles. The company has contracts to supply 450 hybrid buses to Beijing city.

China has been boosting investment and offering incentives to accelerate the development of fuel efficient and eco-friendly vehicles. The country hopes to have 500,000 green cars on the roads by 2011.