Ford just took its first big step toward producing EVs in China.

Ford and Zotye Auto, a Chinese manufacturer, have agreed to create a joint venture dedicated to building "stylish and affordable" electric cars in China. The joint venture carries the straightforward name of Zotye Ford Automobile Co. and both partners have a 50 percent stake in it. The total investment is estimated at $756 million.

Once the government signs off on the deal, the two will establish a new manufacturing plant in the Zhejiang Province, where the joint venture will build a line of EVs for the Chinese market under a new brand name. The two originally signed a memorandum of understanding in August, planting the seeds for this eventual agreement.

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In order for a foreign OEM to establish a manufacturing footprint in China, it must first enter into a joint venture with a local automaker. This mandate was established to help Chinese automakers gain valuable experience in the industry, and it's proved fruitful, with automakers from Daimler to GM setting up shop in the Middle Kingdom. It's unlikely that whatever this JV produces will end up in other markets, including the US, but it could help establish the groundwork for EVs in other markets.

Zotye brings some of its own experience to the table, too. The company has sold more than 22,500 compact EVs in China this year. Zotye knows how to market an electric car in China, which will be invaluable to Ford's efforts.

Zotye Ford won't stop with EVs, either. The joint venture is also investigating mobility services, as the demand for such programs are growing in China in response to heavy traffic and air pollution. Ford didn't offer many details here, but odds are, it will appeal to urbanites who only have an occasional need for a set of wheels.

Ford had promised in the past that it wants at least 70 percent of its Chinese sales to be electrified by 2025, and this puts Ford on the right path to achieve that goal.