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SHANGHAI—Chinese tech and entertainment company LeEco plans to invest 12 billion yuan ($1.8 billion) to build a plant in China to produce smart, internet-connected electric cars.

The plant, which will be based near the picturesque Mogan Mountain in the eastern Zhejiang province, will have an annual production capacity of 400,000 battery-powered vehicles, the company said in a statement Wednesday.

The facility is part of a $3 billion auto theme park which will also include entertainment facilities featuring auto-related elements. All vehicles in the park will be electric, shared, and will be driven autonomously based on internet technology, LeEco said.

The company didn't say when construction will start or production will commence.

"The Moganshan project will be open to all LeEco's strategic partners including Faraday Future in terms of marketing and exhibition, car sharing and auto financing," said Jia Yueting, LeEco's founder and chairman, in the statement.

He also said LeEco and Faraday will deepen their global strategic partnership in terms of manufacturing, research and development, supply chain, and charging facilities.

Faraday Future, backed by LeEco, is building a factory in North Las Vegas, Nevada, and aims to begin selling a car in the U.S. next year.

Huge government subsidies have fueled electric car sales in China, where the government hopes to cut reliance on oil imports and reduce air pollution. The government also hopes that Chinese companies could pioneer the world's electric car market.

Beijing's ambition, as well as Tesla Motors Inc.'s initial success, has inspired dozens of new entrants to the world's largest automotive market.

Wanxiang Group Corp., a Chinese automotive components maker that owns U.S. electric-car maker Karma Automotive, has said it plans to build a $375 million plant to produce electric vehicles. Wanxiang currently doesn't build cars in China and its plan is being reviewed by Chinese authorities.

Other high-profile auto startups include NextEV, which is backed by internet giant Tencent Holdings Ltd. and Sequoia Capital, and Future Mobility Corp., whose investors include Tencent and Foxconn Technology Group, which assembles Apple Inc.'s iPhones.

Rose Yu contributed to this article.

(END) Dow Jones Newswires

August 10, 2016 09:45 ET (13:45 GMT)

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