HANGZHOU - Zhejiang Geely Holding Group will set up a complex for new energy vehicles (NEV) at a cost of more than $5 billion in East China's Zhejiang province.

The auto maker on Sunday signed an agreement with the government of Changxing county, where the base will be located.

The facility will consist of an assembly plant for vehicles, a gear box factory and an industrial park for auto parts, according to the agreement.

The project will be built in two stages, with construction of the first stage to begin in October.

China manufactured 794,000 new energy vehicles and sold 777,000 last year, both ranking the first in the world for three consecutive years, according to statistics from the Ministry of Industry and Information Technology.

The government expects NEV output and sales to hit 2 million annually by 2020, according to a plan released last year.