China's State-owned carmaker BAIC Group has deepened its cooperation with the world's largest battery maker CATL to better explore the burgeoning but increasingly competitive new energy vehicle market.

The two will jointly develop power battery products and CATL will be "deeply integrated into the vehicle development and production" of NEVs bearing BAIC's indigenous brands, according to their strategic deal inked on Monday.

The deal deepens their cooperation that could trace back to 2010 and will further boost each other's development, said the two companies.

BAIC was one of the first Chinese conventional carmakers to make inroads into the NEV market, but its performance has been lukewarm after a short head start.

BluePark, BAIC's NEV subsidiary, sold 2,687 NEVs last month, up 112.75 percent year-on-year.

The growth rate was faster than the sector's average in China, which stood at 61 percent, but BluePark's sales volume was much smaller than giants including BYD and Tesla.

Statistics from the China Passenger Car Association show that retail sales of NEVs in the country totaled 439,000 units in February.

Analysts said the deepened cooperation with CATL will sharpen BAIC's competitive edge in the sector thanks to the battery maker's leading position in terms of market share and technology.

CATL has been the world's largest EV battery maker for six years in a row by installed battery capacity. Its Qilin battery was recognized by the Time magazine as one of the best inventions of 2022.

NEV sales in China, the world's largest market for such vehicles, are estimated to reach 9 million units this year, according to the China Association of Automobile Manufacturers. Last year, their sales stood at 6.9 million units.