China's biggest carmaker Geely is launching a premium electric car brand it hopes will take on Tesla.

The Chinese company, which owns Volvo and Lotus, announced its Zeekr brand on Tuesday to tap into China's demand for electric vehicles (EVs).

It comes as Elon Musk goes on the charm offensive in China praising its plans to tackle carbon emissions.

The Tesla founder has seeking to allay Chinese concerns about his cars' onboard cameras.

Geely said it would develop and manufacture high-end EVs under the Zeekr brand and expected to begin deliveries in the third quarter of 2021.

It already has exposure to premium electric cars through the brands it owns. Polestar, owned by Volvo Cars, develops electric performance cars. It is headquartered in Sweden with vehicle production taking place in China.

Lotus, which is majority-owned by Geely, is working on an electric-powered supercar called Evija.

Geely also owns London black cab maker, the London EV Company, and has focused on building plug-in hybrid taxis, which have both a petrol engine and electric battery.

Zeekr, its own home-grown EV brand, will face fierce competition from Tesla whose Model 3 was the top-selling electric vehicle model in China last year. It will also compete with Chinese groups Nio, Xpeng and Li Auto which are seeing healthy sales.

Last week, Dongfeng Motor, the Chinese partner of Japan's Nissan and PSA Peugeot Citroen of France, said its new EV brand Voyah could start delivering cars to Chinese customers in July.

Beijing wants more than a fifth of vehicles sold in China to be electric by 2025.

Geely has ambitions to become China's first global automaker with a reach similar to Volkswagen. Along with its Volvo and Lotus brands, it owns a minority stake in Mercedes-Benz owner Daimler.

The initial strategy for Zeekr will be focused on the Chinese market but it will also explore overseas opportunities given rising global demand for premium electric vehicles.

The premium brand will operate under a new entity named Lingling Technologies, which will be based in Hefei, eastern China.

"Chairman Li Shufu senses a need to inject his 24 year-old company, Geely, with a startup vibe like what he sees at NIO, Xpeng and Li Auto," said Michael Dunne, chief executive of ZoZo Go, a consultancy firm focusing on the Asian car market.

"To get there, he envisions an electric baby - Lingling Technologies - that operates independently from Geely".

On Tuesday Geely reported its annual results which saw it sell 1.32 million cars in 2020, compared with 1.36 million in the previous year.

Tesla charm offensive

In a short interview with Chinese state television broadcast on Tuesday, Tesla's boss Elon Musk said he was impressed by the carbon emission goals set out in the country's latest five-year economic plan.

Beijing has restricted the use of Teslas among military staff and key government employees over worries about how the carmaker handles data in China.

Mr Musk told Chinese politicians and businessmen over the weekend via video link that Tesla would never provide the US government with data collected by its vehicles in China or other countries.

The military had raised security concerns about the data collected by cameras installed in the cars.

China accounted for about a fifth of Tesla's global revenue of $31.5bn (£23bn) in 2020, according to public filings.