The9 Limited (NASDAQ:NCTY) announced a joint venture with Faraday&Future Inc. to manufacture, market, distribute and sell electric cars in China.

Why It’s Important

The9, a microcap internet company, will diversify its portfolio with 50-percent ownership of the JV and control over business operations.

"FF has the industry leading product technology and strategy, and a team of world-class top talents and resources,” The9 CEO Jun Zhu said in a press release. “Leveraging the technology capabilities of FF, we believe our alliance with FF provides us with a great opportunity to pursue the fast-growing market of electric vehicles in China.”

The California-based Faraday&Futures boasts hundreds of existing patents and 2,000 awaiting approval in the U.S. and China.

What’s Next

The9 will contribute up to $600 million in capital with an initial deposit of $5 million and the rest contingent on funding conditions. Faraday&Future will contribute Chinese land rights and an exclusive marketing and manufacturing license for the V9 and other vehicle models.

The JV will initially prioritize Faraday Future’s new V9 model with a 2020 rollout and an annual production capacity of 300,000 cars.

The9's stock traded higher by 20 percent Monday morning to $ 3.05 per share.

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