Magna International Inc. (MG.TO) plans to engineer and build electric vehicles in China, marking the first time North America’s largest auto supplier is expanding its car manufacturing capabilities beyond its 20-year-old Steyr venture.

The Aurora, Ontario-based company is forming two joint ventures with China’s largest EV maker, Beijing Electric Vehicle Co., known as BJEV. The engineering and manufacturing ventures are set to take over an existing factory in Zhenjiang with the intention of producing vehicles by 2020, Magna said in a statement Monday. Bloomberg News reported in February that Magna was in talks with BJEV’s parent for an EV pact.

China surpassed the U.S. in 2015 as the largest market for EVs, helped by government subsidies and stringent emissions rules. A local facility in China helps Magna enter the fast-growing market while potentially helping it to lessen the impact of any increases in export costs resulting from the intensifying trade spat between the U.S. and China.

Owned by Beijing Automotive Industry Holding Co., the parent of BJEV, the Zhenjiang plant has the capacity to build 180,000 vehicles a year and it will also offer engineering and complete vehicle manufacturing services to other customers. Magna’s Steyr facility in Graz, Austria, works in a similar way, doing contract manufacturing for automakers including BMW AG and Jaguar Land Rover.

Tie-ups with local companies are common in China, with automakers from Volkswagen AG to Ford Motor Co. forming alliances to build and sell EVs. Production is limited by government permits.

The deal is also a boon for BJEV, which is planning to list on a mainland stock exchange. The stock is set to start trading in about two months, Xu Heyi, chairman of its parent, said in early June.

Both Magna joint ventures are subject to conditions including final agreements and regulatory approval.