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BEIJING -- Toyota Motor said on Thursday that it is forming a strategic alliance with Chinese internet giant Tencent Holdings, cooperating in artificial intelligence, cloud computing and big data for electric vehicles sold by the Japanese auto company in China.

Demand for EVs in China has been growing rapidly, but Toyota has been struggling in the market due to aggressive pricing and marketing from local competitors. The Japanese brand will collaborate with Tencent on in-car software -- key to next-generation vehicles -- as it looks to accelerate in the sector.

Hiroki Nakajima, Toyota vice president and chief technology officer, announced the move at a news conference during the Beijing Auto Show, which opened on Thursday.

Internet company Tencent, which has a social networking service used by over 1 billion people, is pushing into the automotive industry as it expects strong growth there.

According to Chinese media, Tencent has also partnered with Audi, a subsidiary of Germany's Volkswagen and a group company of Germany's Mercedes-Benz, among others. It is also working with a joint venture between Toyota and China's state-owned Guangzhou Automobile Group in the cloud computing field.

The popularity of EVs is surging in China due to their convenience, with many in-car operations able to link with smartphones. Indeed, smartphone maker Xiaomi, search giant Baidu and Huawei Technologies are among a fleet of tech companies turning to the sector.