(Yicai) May 31 -- Shares in Jianghuai Automobile Group and Ankai Automobile slumped today after the two Chinese auto manufacturers said they have backed out of an agreement to build a battery factory with FinDreams Battery and Zhechu Energy as the parties failed to agree on the terms.

JAC’s share price [SHA: 600418] closed down 1 percent at CNY16.11 (USD2.22) while Ankai’s stock [SHE: 000868] finished the day down 3.5 percent at CNY4.11.

In September 2022, JAC, Ankai, FinDreams and Zhechu Energy teamed up to form a joint venture that would produce electric car batteries.

But after signing the framework agreement, the partners conducted due diligence of the different parties in the JV, the patent technologies that they would contribute and the ideas that they would exchange, but failed to reach an agreement, Hefei-based JAC and Ankai said.

The termination of the deal will not impact the two firms’ financial and operating conditions, nor impair the interests of the companies and their small and medium-sized shareholders, they said.

The agreement was only a letter of intention, and is not legally binding as the parties have not signed a formal contract, they added.

Editor: Kim Taylor