GM is set to give $400 million to the Chinese company that makes the Chevrolet Volt, according to a person familiar with the deal.
The offer represents the first major U.S. financing to a Chinese automaker, according, a person with knowledge of the matter said.
It follows a $1.1 billion deal earlier this year between GM and China National Petroleum Corp.
The person spoke on condition of anonymity because the deal is confidential.
The deal would give GM a global footprint that would be expanded by more than 400 million vehicles, according the person.
GM also is seeking to acquire a controlling stake in China’s largest automaker.
The new financing will help cover the costs of developing and manufacturing new vehicles in China, and it will also support the global expansion of GM’s global manufacturing operations.
The Chinese company will provide a significant boost to GM’s efforts to expand its global footprint.
The Chevrolet Volt will begin production in 2019, and GM will also make a number of vehicles, including a plug-in hybrid Chevrolet Bolt EV and the Cadillac ATS and XTS crossover models.
The automaker is seeking a deal that could give it a 20% stake in the company, or $1 billion.
The investment is part of GM plans to diversify its business and increase global production, which would give it more global sales than it has had since 2009.GM has been looking for financing to boost its sales and profitability as the company has struggled to gain traction in the U.K., China, India and other countries that it does not dominate.GM’s total U.s. sales declined to 9.6 million in the third quarter of 2017 from 10.7 million the same quarter a year earlier, according a Reuters analysis of government data.
The Volt will be the first plug-insets model sold in the United States.
The first Volt was introduced in 2015.
The Volt’s launch in the UK, where the company is based, was delayed amid concerns about pollution and safety.
The company said it will begin deliveries of the Volt in China in 2019.GM said last month that it had agreed to buy a controlling interest in China National Petrol Corp. to make its China unit.
The announcement came after the company said earlier this month that GM’s Chinese unit would begin production of the Chevrolet Bolt and Cadillac Ats in 2019 and 2020, and to produce and sell the Cadillac XTS and the Chevrolet Tahoe SUV.GM shares rose 1.9% to $54.25 in morning trading on the New York Stock Exchange.