The new company, which will also involve Toyota’s joint venture with Chinese state-owned Guangzhou Automobile Group (GAC), will be established this year and will see GAC-Toyota produce cars that will use Pony.Ai’s ride-hailing software, Pony.Ai said.

The venture marks a new development in the partnership between Pony.Ai and Toyota, which first teamed up in 2019. In the years since, the Japanese automaker has invested hundreds of millions of dollars in Pony.Ai.

Pony.Ai, which has offices in China and the US, has launched robotaxi services in Beijing and Guangzhou.

Toyota last month said it planned to accelerate local design and development of “smart cockpits” that meet the needs of the Chinese market, as part of a broad pivot to electric vehicles as it seeks to catch up with increasingly aggressive local rivals.