Volkswagen pumps 2 billion euros into China electric vehicle bet
Volkswagen AG plans to boost its electric push in China, the world’s biggest auto market, by pumping 2.1 billion euros in two Chinese electric vehicle players, Report informs, citing Reuters.
Volkswagen said it will invest 1 billion euros to take a 50% stake in the state-owned parent of Anhui Jianghuai Automobile Group (JAC Motors) (600418.SS), also taking full management control of its existing electric vehicle joint venture with JAC by raising its stake to 75% from 50%.
The joint venture will launch five more electric models by 2025 when the German giant aims to sell 1.5 million new energy vehicles (NEV) – including battery-electric cars as well as plug-in hybrid and hydrogen fuel-cell vehicles – a year in China.
In a separate transaction, Volkswagen will pay 1.1 billion euros to acquire 26.5% of Guoxuan High-tech Co Ltd (002074.SZ), a maker of electric vehicle batteries, becoming its biggest shareholder. Volkswagen said Guoxuan, based in Hefei like JAC, will supply batteries to its EV models in China.
China has set a target of 25% of 2025 annual vehicle sales to be made up of NEVs. More than 25 million vehicles were sold in China last year.