Germany’s largest carmaker Volkswagen announced on Friday that it would invest around two billion euros (2.22 billion U.S. dollars) in electric mobility in China.
Volkswagen would invest one billion euros by increasing its stake in the e-mobility joint venture with Chinese JAC Motors from 50 to 75 percent and also acquire 50 percent in JAC‘s parent company JAG, the company stated.
“Together with strong and reliable partners, Volkswagen is strengthening its electrification strategy in China,” stated Herbert Diess, chief executive officer (CEO) of Volkswagen.
Founded in 2017, the JAC Volkswagen joint venture is an all-electric company which develops, produces and sells new energy vehicles (NEV). According to the German carmaker, an expansion of up to five additional battery electric vehicles (BEV) models by 2025 is planned, as well as building a “full-scale e-model factory.”
Furthermore, Volkswagen announced to acquire a 26 percent stake in Chinese battery manufacturer Gotion High-Tech Co., Ltd. also for around one billion euros, thus becoming the Chinese company’s largest shareholder.
Volkswagen would become the first global automaker to invest directly in a Chinese battery supplier, said the company. The partnership with Gotion, was an “opportunity” for Volkswagen to “achieve deeper know-how in the field of batteries.”
The electric car segment was “growing rapidly” and offered “a great deal of potential for JAC Volkswagen,” said Diess. With the investment in Gotion, Volkswagen would be “actively driving forward the development of battery cells in China.”
According to Volkswagen, Gotion would maintain its projects over the entire battery value chain from sourcing, development and production to recycling and was “in the process of becoming a certified Volkswagen Group battery supplier in China.”