Volkswagen invests 2.1 billion euros in China business with electric vehicles26. November 2020
The German car giant Volkswagen intends to invest around 2.1 billion euros in its China business with electric vehicles. The company describes this step as the next chapter for its business activities in China. The sum is divided into 1 billion euros to increase the shareholding in JAC Volkswagen, the VW joint venture in China for electric vehicles, and a further 1.1 billion euros for a stake in the US-based battery company Gotion.
The €1 billion investment in the Chinese joint venture JAC Volkswagen includes a 50 percent stake in JAG, the parent company of JAC Automobile Group. As a result, Volkswagen’s stake in JAC Volkswagen will increase from 50 to 75 percent. By increasing its shareholding, Volkswagen also gains control and management of the company. There are plans to develop further electric vehicles and the corresponding infrastructure for the Chinese market. This should help Volkswagen’s business in China to break even and achieve sales of 1.5 million electric vehicles in 2025. Volkswagen JAC Volkswagen was founded in 2017 and develops, produces and sells exclusively electric vehicles or New Energy Vehicles (NEVs), as these vehicles are often called in China.
The other €1.1 billion will make Volkswagen the largest shareholder in Gotion, an American subsidiary of Gouxuan High-Tech, with a 26 percent stake. The investment is intended to ensure the supply of batteries for the production of electric vehicles in China. Dr. Stephan Wöllenstein, Chairman of the Board of Management of Volkswagen Group China, said the project will make the company a local and sustainable car manufacturer and will create new business opportunities in the field of electric vehicles in China. Volkswagen is the first international automaker to invest directly in a Chinese battery manufacturer. The transaction will be completed by the end of this year if the regulatory authorities approve the transaction.
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