Chinese Air Conditioning Maker Investing $2 Billion in Electric Busmaker

China’s largest air-conditioning manufacturer Gree will be investing $2 billion in shares to buy a Chinese company that builds electric buses, lithium batteries, and drivetrain components.

Gree Electric Appliances will be selling new shares to fund the purchase of Zhuhai Yinlong New Energy Co., Bloomberg reported. Yinlong has been manufacturing batteries for plug-in electrified vehicles since 2009 and also builds drive trains for PEVs and hybrids.

The Chinese company appears to have up to seven electric cars in the development phase, but so far has focused on building electric buses. Yinlong reported having sold 3,189 electric buses as of January.

Gree is making the purchase in order to support the Chinese government’s push to clean up the environment and promote greener technologies, Gree chairman Dong Mingzhu said in an interview in March.

“The decision was made with the premier’s work report target to have blue skies, green pastures and clear water,” Mingzhu said, referring to Premier Li Keqiang’s report to the legislature outlining the government’s priorities.

Gree is joining ranks with more than 200 startup and acquisition launches in China’s emerging PEV space. Former Volvo and Geely executive Freeman Shen plans to raise $1 billion to fund his WM Motor electric car startup.

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With three production bases across the country, Yinlong has the capacity to make 33,000 electric buses and 100,000 electric SUVs annually, according to China Daily.

Gree has been under mounting pressure to find new profit centers, according to an independent researcher interviewed by China Daily. About 95 percent of Gree’s revenue has been coming through air conditioning sales, and investing in the PEV and hybrid market may provide a stronger financial footing, according to the source.