Kaixin Auto (NASDAQ: KXIN) shares are rallying premarket on Friday after the company announced it has decided to establish a new energy vehicle (EV) business unit.
The unit, which will have EV R&D, production, and marketing teams, will be established due to the “Chinese government’s steady support for accelerated development of EVs and the rapid growth of EV market in China.”
“With Chinese consumers’ ever increasing recognition of EV, new energy vehicles are expected to become the mainstream consumer model in the auto industry,” the company said in a statement.
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Kaixin has been in negotiations for mergers and acquisitions with several EV manufacturers with the hope of announcing progress on a deal soon.
The used car dealership firm stated that it is committed to becoming another player in the Chinese EV market, following Li Auto, NIO, and XPeng.
Its share price has rallied 24.55% on the news, trading at $2.08.
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