BYD, the world's largest manufacturers of electric vehicles, announced on Tuesday that it has formed a joint venture with a San Francisco investor that will lease its buses to cities, schools and corporations in the US.

BYD and Generate Capital Inc will establish a program that they said is the first of its kind. As part of the venture, Generate is investing $200 million to buy and lease the buses. BYD will supply the vehicles and market them to customers.

BYD stands for Build Your Dreams. The company has a production plant in Lancaster, California, northeast of Los Angeles.

In announcing the partnership, the two companies said in a press release that the $200 million will help public and private sector clients accelerate the use of battery-powered electric buses by reducing upfront costs.

Scott Jacobs, Generate Capital's CEO and co-founder, said, "Traditional leasing companies typically don't value any residual in electric vehicles, which makes financing difficult. Programs like these are an all-around win for project developers, customers and for the environment."

BYD President Stella Li said that that the partnership will create new financing alternatives to a broader range of clients.

BYD stands for Build Your Dreams. The China-based company has a production plant in Lancaster, California, northeast of Los Angeles.