German automobile manufacturer Audi is teaming with China's FAW Group to help it build new electric vehicle models in a partnership to increase models for the Chinese market to a dozen by the end of the year.
Audi and FAW, a historic state-owned company in China once known as First Automobile Works and dates back to 1953, plan to establish a new joint venture company to build a new range of battery-electric luxury vehicles. Sources familiar with the matter said that Audi and Volkswagen will jointly hold a 60% stake in the new joint venture, while FAW will own the rest.
Audi said that the new models will be based on its Premium Platform Electric (PPE) system.
The platform is the same one being used by Audi's global EV model such as the Porsche Taycan and the Audi E-Tron. Audi developed the PPE platform in cooperation with Porsche.
Audi said that the rollout of new EVs in China, currently the world's largest market for EVs by volume, will herald a new "golden decade" of electrification for the company.
"With the new Audi-FAW company in Changchun, we are further expanding our presence on the Chinese market and actively helping to shape the transformation of the Chinese automotive industry," Audi board chairman, Markus Deusmann, said in a statement.
Audi expects the first China-made electric models using the PPE platform to roll out of its production facility in Changchun by 2024. The city in northeast China is also the headquarters of the FAW-Volkswagen joint venture. Audi also holds a stake in the joint venture.
Audi said that the partnership is part of its strategy to increase its presence in China and to solidify its position in the country's lucrative premium electric vehicle segment. Establishing a local manufacturing facility should also allow it to price its vehicle competitively, Audi said. Last year, Audi sold a total of 727,000 vehicles in China, making it one of its largest markets outside of Europe.
Audi expects to receive approval from Chinese supervisory authorities for the joint venture by the end of March. The company has yet to disclose the exact production capacity of its planned facility or the number of employees it plans to hire.