Volkswagen Group China and JVs to invest EUR15 billion in e-mobility
Volkswagen Group China announced plans to invest a total of roughly EUR15 billion (USDUSD17.4 billion) together with its joint ventures – SAIC VOLKSWAGEN, FAW-Volkswagen and JAC Volkswagen – in e-mobility between 2020 and 2024. The figure comes on top of the EUR33 billion (USD38.4 billion) already announced by the group for development of e-mobility around the globe. Pursuing a strategy of electrification and digitisation, the group will electrify China on a grand scale, producing a total of 15 different new energy vehicle (NEV) models locally by 2025, with 35% of the product portfolio in China made up of fully-electric models.
Chinese President Xi Jinping recently set national targets to reach peak CO2 emissions before 2030, and achieve carbon neutrality before 2060.
Volkswagen Group China CEO Stephan Wöllenstein applauded the news, saying, “We very much appreciate this announcement, which is what we aim to achieve with our goTOzero strategy. Volkswagen is committed to being an active partner in the nation’s drive towards electrification and carbon neutrality.”
The group has set clear objectives for itself in terms of its own carbon-neutrality goals, remaining fully committed to achieving zero net emissions by 2050, both in terms of company footprint and across the fleet of products.
Production at the Volkswagen Group’s two new dedicated MEB facilities will begin in October, with a combined capacity of up to 600,000 units per annum, with Group NEV sales figures for 2020 set to be double those of 2019.
Earlier this year, the carmaker announced plans to raise its stake in its all-electric joint venture, JAC Volkswagen, to 75%. By doing that, Volkswagen is strengthening its electrification strategy in China, the world’s biggest market for e-mobility. A portfolio expansion of up to five additional BEV models by 2025 is planned, as well as building a full-scale e-model factory and finishing the R&D center in Hefei, China.
Meanwhile, the company is gearing up to meet future demand for battery capacity – estimated at 150 GWh come 2025 – by rapidly developing battery partnerships with local suppliers. Volkswagen Group China is looking to integrate further into the battery value chain, and has therefore made the strategic move to acquire a 26% stake in battery manufacturer Gotion. In terms of purchasing, locally-produced NEVs will be equipped with batteries from Chinese supplier CATL, from this year on. In addition, A123 has become the second qualified local battery supplier in China.
High performing batteries are just one of the key success factors for BEVs. Another crucial factor is charging infrastructure. The Chinese government is already investing massively into charging infrastructure, with capacity growing monthly, however, Volkswagen is not relying on this alone to make charging a convenient experience for customers. To this end, CAMS was formed together with partners Star Charge, FAW and JAC. Through CAMS, the company will offer private charging wall boxes and a highly competitive network of public charging stations with DC charging.