The German Automaker Volkswagen AG formed a joint venture with China's Anhui Jianghuai Automobile Co (JAC) as they plan to build a new 5.06 billion yuan electric factory in the eastern Hefei city. The investment was confirmed by the Hefei Economic and Technological Development on a document they posted online.
The document that was posted on Monday confirmed that Volkswagen and JAC had obtained the approval from environmental authorities to build the plant which is capable of producing 100,000 all-electric battery cars every year. The news was confirmed by Volkswagen on Thursday when the company announced that they will launch its first model soon with JAC-Volkswagen. The spokesperson of the company confirmed the joint venture and the plan to build a plant. It was confirmed that the venture will produce the E20X, an electric model, to be launched this year.
Volkswagen is the largest foreign automaker in China. Its sales reached 4.21 million cars on the mainland and in Hong Kong in 2018. The company pledged to manufacture zero-emission vehicles as part of its growth strategy in China.
The German company announced their plan to build not less than 22 million electric cars in the next decade and they plan to build half of the figure in China. The company plans to launch 14 new energy vehicle models this year in the world's largest market for electric cars.
The two companies' joint venture was approved in 2017. The venture announced in 2018 that they will launch a research and development center and they plan to introduce the SEAT brand in China by 2020-2021.
It was also reported this month that Volkswagen negotiates with SK Innovation, a South Korean battery maker, as they plan to accelerate the development of its electric vehicles.
China is the world's largest market for cars. The new vehicle segment in the country continues to grow rapidly and the NEV sales increased 61.7 percent to 1.3 million units last year.
Volkswagen recently announced its plan to launch a fully electric sports utility vehicle for China starting in 2021. The company plans to surpass the Chinese market leader Tesla in producing zero emissions vehicles. Volkswagen Chief Executive Herbert Diess said that ID ROOMZZ will be the company's flagship electric cars in China. He said that they plan to produce more than 22 million electric cars in the next 10 years. He added that around half of Volkswagen's engineers were working on products destined for China.
