Volkswagen has cleared an important hurdle in its push to produce electric cars in China. Beijing’s top planning authority has approved the German carmaker’s joint venture with its Chinese partner, Jianghuai Automobile Group (JAC Motor), both companies confirmed to Handelsblatt.
With that, VW has announced it will start selling the first fully electric cars in China. The pure battery vehicles are expected to roll off the assembly line later this year and will come with a new brand name. Under the joint venture agreement, Volkswagen and JAC Motor will produce 100,000 e-cars annually. According to JAC Motor, which is state-owned, the 25-year partnership is worth more than 5.1 billion yuan, or $727 million. A Volkswagen spokesperson in Beijing confirmed an agreement had been concluded but declined to comment on the size of the investment.
It’s a bold move: Volkswagen is playing catch-up in matters of electric mobility in China. To change that, the Wolfsburg-based carmaker aims to sell 400,000 e-cars and hybrids – cars which combine combustion engines and electric motors – in China by 2020. Five years later, it is hoped that number will rise to 1.5 million vehicles.