Aerial photo taken on Nov. 30, 2018 shows a cloud rail train running past the headquarters of China's new-energy vehicle manufacturer BYD in Shenzhen, south China's Guangdong Province. (Photo: Xinhua)

China's BYD Auto Industry Co., Ltd. on Wednesday signed an agreement with Japanese carmaker Hino Motors, Ltd. on the establishment of a joint venture for commercial battery electric vehicles (BEVs) development.

According to the agreement, the new company is scheduled to be established in China in 2021, with BYD and Hino each making a 50 percent capital investment.

It will combine the strengths of both companies to develop BEVs and electric units for customers, primarily in the Asian market, according to a source with BYD.

The joint venture plans to launch vehicles under the Hino brand by 2025, said the source.