The joint venture between Beijing Electric Vehicle and Didi, called BAIC-Xiaoju New Energy Auto Technology, will work to develop "next-generation connected-car systems" through projects related to electric and hybrid vehicles and artificial intelligence.
In recent years, Beijing has aggressively pushed for so-called new energy vehicles as a way to curb air pollution. Those include passenger cars and other types of vehicles that run either purely on battery or is a plug-in hybrid electric vehicle.
BAIC has said it plans to stop manufacturing and selling gas-driven car models by 2025.
For its part, Didi said it has close to 400,000 new energy vehicles registered on its platform, many of which are through its partnerships with electric vehicle makers such as BYD.
The China Association of Automobile Manufacturers predicted that new energy vehicle sales in the country will hit 1.6 million in 2019, according to Reuters. That followed after car sales in China contracted last year for the first time since the 1990s, the news agency reported.
Last year Chinese authorities announced a broad crackdown in the domestic ride-hailing market, targeting Didi with fines following the death of two passengers in separate incidents. The company has about 550 million users on its platform and is backed by Japan's SoftBank. It's valued at $56 billion according to CB Insights.