Volkswagen has announced some big moves in China as part of its electrification strategy in the world’s largest auto market. The German giant plans to increase its share in JAC Volkswagen, its joint venture for e-mobility. Around one billion euros is to be invested for this purpose.
The amount includes the acquisition of 50% of the Anhui government-owned entity JAG, the parent company of Volkswagen’s JV partner JAC, and an increase of its stake in JAC Volkswagen (the JV company) from 50 to 75%. By gaining management control of the latter, VW is paving the way for more electric models and infrastructure. The parties intend to close the deal by the end of the year, subject to customary regulatory approvals.
Founded in 2017, the JAC Volkswagen joint venture is an all-electric company which develops, produces and sells new energy vehicles (NEVs). A portfolio expansion of up to five additional full EV models by 2025 is planned, as well as building a full-scale e-model factory and finishing the R&D centre in Hefei.
Separately, Volkswagen will acquire a 26% stake in battery manufacturer Gotion High-Tech for around 1.1 billion euros, becoming the company’s largest shareholder.
An important part of an EV is the battery, and VW acknowledges that securing future battery supply to meet demand will require increased localisation. With the stake in Gotion, VW is the first global automaker to invest directly in a Chinese battery supplier. The deal will not affect ongoing contracts with other battery suppliers, VW says.
According to Wolfsburg, the partnership is an opportunity for it to achieve deeper know-how in the field of batteries. Gotion maintains various current and future projects over the entire battery value chain from sourcing, development and production to recycling. The company is in the process of becoming a certified VW Group battery supplier in China, including supplies for local Modular Electric Drive Matrix (MEB) vehicles.
“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 direct in a Chinese battery supplier. These investments shape the character of Volkswagen in China, making it a more localised, more sustainability-focused mobility company. By opening up the market, China is giving Volkswagen new business opportunities,” said Stephan Wöllenstein, CEO of Volkswagen Group China.
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, which is also the world’s biggest market for e-mobility.
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The future rest in China hands, BYD and Geely…
Even China is now cutting subsidies for EV’s.
Apparently, they don’t believe in this EV thing any more, at least not with batteries.
I visited China and i can tell you the china today is not the one we always remembered in the past. They are so advance its not even funny. Their mentality cannot even catch up with their advancement. Tesla, audi, bmw, merc, porsche are on the roads like our protons. EVs are also everywhere. I go mcd with 30 orders in front of me. 3-5 mins ready. Giler. Speed and service is everything over there. Paperless cashless. OMG. I feel so left behind macam jakun kat sana. Saw one of their local EV car lynk & co. Giler, looks better than Tesla 109times
Habislah Germany! VW isn’t investing EU 2Bil right when they needed the money bcoz of COVID19. This must be caused by German workers inefficiencies as admitted by their bosses. Even local DRB boys are more hardworking than Wolfsburg workers. Habislah Germans!
Come and invest in Malaysia. We gonna have flying car. Are you not impressed?
Why invest in China compare to Malaysia .Malaysia with 30 million and China with 1.4 billion population
Furthermore in Malaysia , most will buy cheap , cheap lower quality car like perodua, proton saga, Toyota Vios , honda city.
Even VW invest in Malaysia , VW will earn peanuts profit making it unviable in the long term unless for ASEAN Market export. Our ASEAN neighbour already got more than few manufacturers like it be korean or Japanese brands and their own markets are already quite saturated.
Meanwhile, China is slightly different. Chinese dislike Japanese cars or Korean cars . They always like to buy European cars making them the world biggest market for European products. Chinese always feel they are more affluent in status if they drove Europeans.
Malaysia is third world , most buyers wants cheap , cheap cars and only the well to do or professionals will buy European vehicles.
So this simple fact and survey show that why VW better invest in China. German are not stupid and they know where the money pots are ?