Electric carmaker NIO (NIO) has entered into a preliminary agreement with the municipal government of Hefei, Anhui province, China, for funding and new factories. The agreement is in the collaborative stage with Hefei officials.

NIO’s main manufacturing hub is in Hefei, which is expected, through the funding, to bring long-term growth for the automaker as well as the city.

The government is expected to provide both resources and funding for NIO, which has plans to locate its China headquarters in the city as well as expand its current operations while building on its relationships within the region.

According to CNBC, the talks with Hefei officials could bring in more than 10 billion yuan ($1.4 billion) for the electric car company. The monies could help NIO, which has struggled with cash flow and losses, the news outlet said.

With news of the agreement, NIO’s stock reportedly surged 30% in pre-market trade on Tuesday. Shares were up over 13% mid-day. At 1:54 p.m. EST on Tuesday, shares of NIO stock were up 13.9175%.

NIO said it will announce more information about the agreement as it becomes available.

Chinese EV maker NIO
Chinese EV maker NIO has laid off another 141 employees in the U.S. Visitors look at a Nio ET Preview car on the opening day of the Shanghai Auto Show in Shanghai on April 16, 2019. - Global car makers flock to the Shanghai Auto Show this week with the world's largest vehicle market facing an unfamiliar sales slump just as China veers toward an ultra-competitive electric future. Getty Images/GREG BAKER
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