Hyundai Motor Group plans to buy all the shares held by its Chinese partner in their Sichuan province-based joint venture by next year, with a view to hydrogen fuel car production in the province, an executive at Hyundai Motor told Yicai Global.

Sichuan Hyundai Motor, the JV, will become China’s first foreign-invested commercial car company to achieve full overseas ownership, as well as the second foreign-owned carmaker in China after Tesla, if the transaction reaches fruition.

The company is mulling making H-fuel cars in the southwestern Chinese province and seeking partnerships with local government and companies to that end, the report said.

Formed in August 2012, Sichuan Hyundai Motor, half-owned by Ziyang-based Sichuan Nanjun Automobile Group and Seoul-based Hyundai Motor, currently mainly produces commercial vehicles, engines and car parts, according to the Qixinbao company data platform.

Sichuan Hyundai Motor projected the maximum output of its two factories in Ziyang and Chengdu, Sichuan province at 160,000 units in its annual report. It sold 2,087 cars from January to August in a steep drop from the 38,560 units it moved in 2016.

The company was rumored at one time to be in the midst of a shutdown, the report said.

Sichuan’s provincial government penned a hydrogen-fuel agreement with Hyundai Motor, the government said in a statement on Sept.2. It, Sichuan Hyundai Motor and Hyundai Motor have set up a special team to promote H-fuel car production and H-fuel stations.

In April 2018, Beijing said it would phase out restrictions on foreign ownership of China-based auto production joint ventures formed with local companies, Automotive News reported.

Under the government’s schedule, the limits were lifted on production of electrified vehicles in 2018 and will end for output of commercial vehicles in 2020 and passenger vehicles in 2022.

Last year, Tesla was approved to build a wholly owned electric vehicle production subsidiary in Shanghai while BMW Group was allowed to raise its interest in its car joint venture with Brilliance China Automotive Holdings to 75% from 50%.

Previously, a foreign automaker’s interest in China-based joint ventures was capped at 50%.