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April 25, 2019 01:16 PM

Volkswagen plans EV plant with JAC in China

Reuters
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    The VW-JAC joint venture's first model will be the E20X subcompact crossover.

    BEIJING -- Volkswagen Group's joint venture with China's Anhui Jianghuai Automobile Co. (JAC) plans to invest 5.06 billion yuan ($750.8 million) in a new electric car factory in eastern Hefei city, according to local authorities.

    A document posted online by the Hefei Economic and Technological Development Area showed that VW and JAC had obtained approval from environmental authorities to build a plant capable of producing 100,000 full-electric cars a year.

    Volkswagen Group China on Thursday confirmed the numbers that had been included in previous official documents and said JAC-Volkswagen would launch its first model soon.

    A spokesperson for the joint venture confirmed plans for the plant, saying the approval represented an "orderly advancement of the project" and the venture's first electric model, the Sol E20X, will be launched this year.

    VW, China's largest foreign automaker with sales of 4.21 million cars on the mainland and Hong Kong in 2018, has pledged to ramp up production of zero-emission vehicles as part of its growth strategy in the country.

    VW has said it plans to produce more than 22 million electric cars in the next 10 years, with over half of them built in China. It plans to launch 14 new energy vehicle models in China this year.

    VW's joint venture with JAC, approved in 2017, said last year it would launch a research and development center. It also planned to introduce the Seat brand to China by 2020-2021.

    China's car market, the world's largest, contracted for the first time last year since the 1990s. However, the new energy vehicle segment is still growing rapidly and NEV (New Energy Vehicle) sales jumped 61.7 percent to 1.3 million units in 2018.

    The China Association of Automobile Manufacturers has said NEV sales could hit 1.6 million units this year.

    Volkswagen has started building a $2.5 billion NEV plant in Shanghai with SAIC Motor, which will make VW Group's Audi cars. SAIC Volkswagen said the new plant would have an annual capacity to make 300,000 cars and begin production from 2020.

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