Volkswagen plans to invest $2.33 billion in two separate Chinese electric vehicle firms, setting a giant print in the world’s biggest auto market.
According to the company, they will invest $1.1 billion to take a 50% stake in the state-owned Anhui Jianghuai Automobile Group (JAC Motors), while raising their stake in an existing electric vehicle joint venture with JAC from 50% to 75%.
Reuters reports that the joint venture will launch five more electric models by 2025 and establish a car manufacturing base. In the long run, Volkswagen aims to sell 1.5 million new energy vehicles (NEV) per year in China by 2025. These will include battery-electric cars and plug-in hybrid and hydrogen fuel-cell vehicles.
Furthermore, the company will invest $1.2 billion to acquire 26.5% of Guoxuan High-tech Co Ltd, a maker of electric vehicle batteries, therefore becoming its largest shareholder. Guoxuan will then supply batteries to Volkswagen’s EV models in China.
Volkswagen is a German automaker with its headquarters in Wolfsburg. It was the largest automaker by worldwide sales in 2016 and 2017. The group’s biggest market is in China, which delivers 40% of its sales and profits.
In October 2019, the company partnered with Siemens to unveil an electric Volkswagen Golf, dubbed e-Golf, in Rwanda. The electric car project followed the Rwandan government’s initiative to stimulate electricity demand, bridging the 81MW demand gap.
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