Chinese regulator approves VW-JAC Motor electric car venture
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Germany’s Volkswagen AG and Anhui Jianghuai Automobile Group have received approval from Chinese regulators to form a joint venture to make electric vehicles, the two automakers said on Monday.
The National Development and Reform Commission (NDRC), China’s top state planner, gave a green light to JAC and VW to build 100,000 pure battery electric vehicles annually in a project worth 5.1 billion yuan ($740 million), according to a JAC Motor stock exchange filing.
A VW spokesman confirmed the approval but said certain administrative procedures still needed to be completed for a joint venture contract to be signed with JAC Motor.
Volkswagen, China’s largest foreign automaker, has pledged to rapidly develop a range of electric vehicles as the Chinese government aggressively promotes the segment as a way to cut intense smog in much of the country.
VW already has joint ventures with China FAW Group and SAIC Motor Corp Ltd in the country.
The has company previously said it aims to sell 400,000 “new energy vehicles,” a category which includes pure electric and plug-in petrol-electric hybrids, in China by 2020 to meet strict Chinese fuel economy and emissions regulations, with electric vehicles made with JAC Motor coming in addition to that figure.
Questions & Answers
Q.What is the primary purpose of this joint venture between Volkswagen and JAC Motor?
What is the primary purpose of this joint venture between Volkswagen and JAC Motor?
The joint venture aims to manufacture pure battery electric vehicles. This initiative aligns with the Chinese government's aggressive promotion of the electric vehicle segment to reduce smog.
Q.What is the planned production capacity and investment for the new electric vehicle venture?
What is the planned production capacity and investment for the new electric vehicle venture?
The project is approved to build 100,000 pure battery electric vehicles annually. It involves an investment worth 5.1 billion yuan, equivalent to $740 million.
Q.Does Volkswagen already have other partnerships in China related to vehicle manufacturing?
Does Volkswagen already have other partnerships in China related to vehicle manufacturing?
Yes, Volkswagen, as China's largest foreign automaker, already operates joint ventures within the country. These existing partnerships are with China FAW Group and SAIC Motor Corp Ltd.
Q.How does this new electric vehicle production with JAC Motor fit into Volkswagen's wider sales targets for new energy vehicles in China?
How does this new electric vehicle production with JAC Motor fit into Volkswagen's wider sales targets for new energy vehicles in China?
Volkswagen aims to sell 400,000 'new energy vehicles' in China by 2020. The electric vehicles produced with JAC Motor will be an additional contribution to this figure.