Volkswagen to pour $2.3 bil. into Chinese carmaker, eco-vehicle battery maker
TOKYO, NNA – Volkswagen AG, the world’s largest automaker, is betting on the environmentally friendly vehicle sector in China by boosting its stakes in a state-owned carmaker and lithium-ion battery producer, with a total investment of 2.1 billion euros ($2.3 billion).
The German car giant said last Friday that Volkswagen Group China will invest around 1 billion euros to increase its holding shares in JAC Volkswagen, a 50-50 e-mobility joint venture with Anhui Jianghuai Automobile Group Corp. (JAC), to 75 percent.
The JV, founded in 2017, develops, produces and sells eco-cars categorized in China as new energy vehicles. It plans to build a full-scale EV factory and a research and development center in Hefei, the capital of Anhui Province, according to a statement.
JAC said in a separate statement that the local venture aims to produce 350,000 to 400,000 units of EVs in 2029.
The 1 billion euro investment includes the acquisition of a 50 percent stake in Anhui Jianghuai Automobile Group Holdings Ltd. (JAG), JAC’s parent firm fully owned by the Anhui provincial government.
The move highlights the commitment of China’s leading car maker group to the world’s biggest automobile market.
Volkswagen (China) Investment Co. and the provincial government have signed the letters of intent on the share transfer, which is subject to regulatory approval, for scheduled completion by the end of this year, Volkswagen’s statement said.
The European carmaker will also buy a 26 percent stake in Gotion High-Tech Co. for another 1 billion euros to become its largest shareholder, marking its first direct investment in a Chinese battery supplier, also by the year-end, the statement said.
Volkswagen is strengthening its electrification strategy in China as the EV segment is growing rapidly, Herbert Diess, CEO of Volkswagen AG, said in the statement. “We are actively driving forward the development of battery cells in China through our strategic investment in Gotion,” he said.