Volkswagen Group, stung by its diesel emissions scandal, has formalized its talks with a Chinese automaker that could lead to production of more electric vehicles around the world.

Germany’s VW signed an agreement with Anhui Jianghuai Automobile to keep negotiating on how to “achieve long-term cooperation in the joint development of all-electric vehicles in China,” the companies said in a joint statement.

While it has had a low profile outside of China, compared with makers like Geely, Jianghuai says it sold 333,639 vehicles and chassis in the first six months of the year under its two vehicle brands, Jianghuai and Ankai.

With some of the worst air pollution in the world, China has put its automakers under pressure to come up with vehicles that will reduce emissions while boosting fuel economy. Plus, much of the travel inside China takes place in its densely populated and congested cities, ideal environments for electric cars.

“As we aim to be at the forefront of e-mobility, Volkswagen Group is looking forward to explore all options to set up a close and mutually beneficial partnership with JAC,” said Matthias Müller, VW’s board chairman, in a statement after the agreement was signed at VW headquarters in Wolfsburg, Germany. “We believe this cooperation would not only benefit our two organizations, but would also be of great value to our customers, a sound environment and the Chinese society in general.”

Volkswagen continues to reel from its admissions last year that it rigged more than 11 million diesel-powered cars around the world with software that allowed them to beat emissions tests. The company is paying out billions in the U.S. to try to settle claims with the government and customers, and criminal investigations are still underway.

In the aftermath, VW has indicated that it is going to move away from what it had called “clean diesels” — which accounted for about 20% of its U.S. sales alone — and more toward battery-powered cars. VW Group, which includes other brands like Porsche and Audi, says it will have 30 new electric models over the next decade.

China, too, hopes to become an electric-car leader.

“We look forward to a full-scope cooperation together with Volkswagen Group, focus on new energy vehicles, to provide Chinese consumers with highly cost-effective battery-powered electric vehicle products that promote the development of the Chinese new energy vehicle sector as well as the Chinese auto industry’s transformation,” said An Jin, chairman of Anhui Jianghuai.