Volkswagen has today shared its plans to increase its e-mobility activities in China. The German automaker has decided to increase its stake in JAC Volkswagen to 75% up from 50%.
JAC Volkswagen Automotive Co was formed in December 2017 in a 50:50 venture between Volkswagen Group and JAC Automobile Group, a Chinese state-owned manufacturer. The joint venture was aimed at developing, producing and selling New Energy Vehicles (NEVs) in China. The portfolio includes up to five additional battery-operated EV models by 2025, as well as building a full-scale e-model factory and finishing the R&D centre in Hefei, the capital and largest city of Anhui Province in China.
With Volkswagen gaining management control, it’s looking to introduce more electric vehicles (EVs) and boost its electric infrastructure around the country. Furthermore, Volkswagen will acquire a 26% stake in battery manufacturer Gotion High-Tech for around €1 billion, becoming the company’s largest shareholder. This makes Volkswagen the first global automaker to invest directly in a Chinese battery supplier.
Dr. Herbert Diess, CEO of Volkswagen AG, said: “Together with strong and reliable partners, Volkswagen is strengthening its electrification strategy in China. The electric cars segment is growing rapidly and offers a great deal of potential for JAC Volkswagen. We are actively driving forward the development of battery cells in China through our strategic investment in Gotion.”
Volkswagen Group China has already outlined its route to becoming a net carbon-neutral company. In 2025, around 1.5 million NEVs are planned for delivery to customers across the country. It’s no surprise to learn that China is the world’s biggest market for e-mobility products.
Dr. Stephan Wöllenstein, CEO of Volkswagen Group China, said: “I am delighted with this strategic milestone in our mutual and trusted relations as Volkswagen takes a strategic role in a state-owned company for the first time, as well as investing directly in a Chinese battery supplier. These investments shape the character of Volkswagen in China, making it a more localized, more sustainability-focused mobility company. By opening up the market, China is giving Volkswagen new business opportunities.”
By increasing its capital expenditure in such Chinese companies, Volkswagen is looking to take the next step in its Chinese electrification strategy. As one might imagine, this could also translate to further growth outside of China, whereby the company is looking to electrify its entire fleet.