The VW Group will invest €2.1 billion ($2.33 billion) in two separate Chinese EV companies. The first investment will see €1 billion ($1.1 billion) going towards acquiring 50 percent of the state-owned parent company of JAC Motors, the Anhui Jianghuai Automobile Group (JAC Motors), and raising VW’s stake in its existing EV joint venture with JAC from 50 percent to 75 percent.
The German carmaker will then invest a further €1.1 billion euros ($1.22 billion) to acquire 26.5% of Guoxuan High-tech, an EV battery maker.
This strategy ensures that VW will have full management control of the joint venture with JAC, said the company’s China CEO, Stephan Wollenstein.
Read Also: VW Group Considering Expansion Beyond China’s Borders For Jetta Entry-Level Brand
Furthermore, this joint venture will launch five more EV models by 2025, while also establishing an EV factory in Hefei, reports Autonews Europe.
VW wants to sell 1.5 million new energy vehicles (NEVs) per year in China by the year 2025, which means not only fully-electric models, but also plug-in hybrids and fuel cell vehicles. JAC-VW will kick off production of fully electric cars based on Volkswagen’s MEB platform in 2023, added Wollenstein, with China wanting 25 percent of all annual vehicle sales in 2025 to be made up of NEVs.
As for the investment in Guoxuan, the Chinese company is based in Hefei just like JAC and will supply VW (who will become Guoxuan’s largest shareholder) with batteries for its locally made electric models.
VW is just the latest foreign carmaker to increase ownership of operations in China since the government begun permitting such transactions as of 2018, as BMW also took control of its main local venture. Currently, VW also has established joint ventures with the state-owned FAW Group as well as SAIC Motor.
