BMW is in advanced talks with China’s Great Wall to manufacture a battery-powered Mini in the country as the German carmaker accelerates its electric vehicle plans in the world’s largest car market.

The vehicle, due out in the early 2020s, would be different from the fully electric Mini that the company plans to assemble at its Oxford site using German batteries from 2019. China is by far BMW’s biggest market. Last year it sold nearly 600,000 cars in the country, nearly twice as much as its sales in Germany.

The pair have signed a letter of intent, and are finalising details for a full joint venture.

BMW has not yet decided whether the model will be made for the Chinese market only, or could be exported around the world, a move that would potentially pit it against the German group’s other Mini plants in Holland and Britain.

BMW last year insisted that discussions over electric cars would have no impact on the UK production of the Mini range.

The two companies have been in talks to work together since April 2016.

China is the world’s largest market for electric vehicles, with government-driven ambitions to accelerate take-up of battery cars in order to help tackle air pollution in its major cities.

BMW, which sells the all-electric i3 and a range of plug in hybrid cars but has been seen as lagging behind some of its premium rivals in rolling out electric technology, plans to release 25 electric or hybrid models by 2025 including 12 pure-electric models.

The company already has a joint venture in China with the carmaker Brilliance, which it said will not be affected by the talks.

Most major carmakers in China have more than one joint venture, a structure required by the Chinese government to manufacture cars in the country.

Additional reporting by Patrick McGee.

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