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October 05, 2016 01:00 AM

VW will build budget EVs with China's JAC under new brand

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    PARIS -- Volkswagen Group will assemble low-priced electric cars at a joint venture it plans to establish with China's Jianghuai Automobile, VW China chief Jochem Heizmann told Chinese media.

    The vehicles will be built on JAC's electric car platform and will be marketed under a new brand, Heizmann said at the Paris auto show last week.

    Doing so would allow VW to quickly start EV production in China, Heizmann said.

    Last month, VW and JAC signed a memorandum to incorporate an EV joint venture. The two parties expect to ink a definitive agreement later this year.

    Heizmann also said that Volkswagen's joint ventures with SAIC Motor Corp. and China FAW Group Corp. will produce EVs built on Volkswagen's EMB platform for electric cars. That will occur in 2020 or 2021.

    Local EV production will allow VW to meet China's increasingly strict fuel economy requirements as well as its requirements for EV production.

    By 2020, automakers operating in China must cut average fleet fuel consumption to 5 liters per 100 km, down from 6.9 liters as of last year. That would equate to an average fuel economy of 47 mpg, up from 34 mpg.

    In 2018, Beijing also plans to introduce a California-style carbon trading scheme that will require automakers with sales exceeding 50,000 vehicles to produce EVs locally.

    For the first eight months, VW sold 2.47 million passenger vehicles under its various brands, an increase of 9.4 percent from the same period last year.

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