Volkswagen will invest more than 10 billion euros ($12 billion) along with its partners in China to build new energy vehicles in the country, the company said on Thursday. Volkswagen is also establishing a new joint venture with state-owned JAC Motors to make electric vehicles, with an aim to get the first electric car to market by next year, the company said in a press release on the eve of the Guangzhou Auto Show.
The move comes as China has put in place a series of carrots and sticks to compel carmakers to produce more fuel efficient and eventually petrol-free cars. Volkswagen has been a laggard in the area so far, selling just a few hundred "green" cars among sales of four million vehicles in China last year. The investment and partnership will help the German manufacturer reach its goal of introducing dozens of new energy models and delivering 1.5 million new energy vehicles in the country by 2025. "China is leading the way to the final breakthrough in the adoption of e-mobility and Volkswagen Group China is determined to be at the forefront," said Jochem Heizmann, president and chief executive of Volkswagen Group China.
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