VW to put $17.5bn into China’s electric cars

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18 September 2020, Saxony, Zwickau: An employee at the Volkswagen plant in Zwickau checks a VW ID.4 in the light tunnel in the so-called finish. Volkswagen produces the first purely electric SUV at the Zwickau plant. The ID.3 is already rolling off the production line here. Of the 1.5 million electric vehicles of the brand planned annually until 2025, about 500,000 units are expected for the ID.4. Photo: Hendrik Schmidt/dpa-Zentralbild/ZB

This will take the company’s total investment in the sector to nearly 40 billion euros.

German car giant Volkswagen on Monday announced a fresh 15 billion euro (US$17.5 billion) splurge on China’s vast electric vehicle potential.

Global carmakers are pegging hopes on an increasingly electric future with China at the forefront as a customer base and manufacturing hub.

Beijing has targeted a 25% adoption of energy-saving vehicles by 2025.

Volkswagon’s commitment – made with its three Chinese joint ventures – see the firm double down on EV car manufacturing and the linked infrastructure between 2020 and 2024 and takes its total investment in the sector to nearly 40 billion euros.

China accounts for about 40% of the Wolfsburg-based automaker’s sales and has become the world’s largest car market in recent years.

The group’s stable of 12 brands includes names such as Porsche and Audi.

Fifteen “models across the group’s brands will be produced locally in China” by 2025 Volkswagen said in a statement and “35% of its product portfolio in the country will be electrified models.”

Earlier this month, Chinese President Xi Jinping vowed the country would go carbon neutral by 2060, pledging to reach peak emissions in 2030.

Production at two new dedicated “MEB” facilities in China – a battery-powered platform forming the basis for a whole range of vehicles – will begin next month.

Locally-produced new energy vehicles in China will be equipped with batteries from Chinese supplier CATL from this year.

But questions hang over the viability of expensive EVs in a vast country which will require huge investment in charging points to turn buyers from gasoline cars.

SEPTEMBER 28, 2020

AFP

Author: uwe.roland.gross

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