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Thursday, October 15, 2020

Volkswagen to invest 15 billion euros in China

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The German automotive group wants to expand into electrics in the world’s largest automotive market (China)

German auto giant Volkswagen on Monday announced an additional investment of 15 billion euros with its joint ventures by 2024 to expand into electrics in China, the world’s largest automotive market.

There are plans to produce locally 15 new fully electric vehicles by 2025, which will represent 35% of the product portfolio in the country, according to a statement.

The Wolfsburg group, of which China represents 40% of sales, will invest alongside its joint ventures SAIC, FAW-Volkswagen, and JAC Volkswagen, in which the German has already invested one billion euros in May to take the majority.

This investment is in addition to the 33 billion euros already committed by the German in the electric car in the world over the same period.

Production of future electric models will start in October at two new factories using modular platforms, capable of producing multiple models, with a combined capacity of up to 600,000 units per year.

Carbon neutrality in China

The announcement comes days after China, the world’s biggest polluter, ahead of the United States, through the voice of its President Xi Jinping, surprised by committing to carbon neutrality by 2060.

“Volkswagen is committed to being an active partner” towards this goal, VW China boss Stephan Wöllenstein said in the statement.

In May, VW invested 1.1 billion euros to acquire a stake in a local battery manufacturer, Gotion High-Tech.

China’s auto industry is showing signs of recovery lately after the collapse of individual car sales by nearly 80% in February when consumers were forced to stay at home and the economy nearly came to a halt to curb the epidemic linked to the new coronavirus.

Electric cars are one of the main attractions at the Beijing Motor Show which opened on Saturday, with China aiming to increase the share of electrics to 25% by 2025.

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