Zhejiang CFMoto Power (SHA:603129) will invest 3.5 billion yuan to establish a production base for motorcycles and electric vehicles, according to a Shanghai Stock Exchange disclosure on Wednesday.

The Chinese motorcycle and all-terrain vehicle maker will build the production base through its unit, Zhejiang Jihe Intelligent Equipment.

The production base is expected to produce 3 million units of motorcycles, electric vehicles and their core components.

The company signed an investment agreement with the local government of Chongfu Town, Tongxiang City, China, to obtain support for the construction of the project, the disclosure said.

The company's shares dropped less than 7% in recent trade.