Volkswagen Pumps $2.2 Billion in China, Buys Into Key Battery Manufacturer

VW deepens the ties with China 1 photo
Photo: Volkswagen
The current expansion plan of German auto giant Volkswagen calls for no less than 75 new electrified models to be released on the global markets by the end of the decade across the group. A key part of this plan is the expansion into China.
The German carmaker is already a major player in the Asian market, where it has several partnerships with local car companies. One of its largest such joint companies is the one established with JAC, a venture that until this week was equally owned by the two.

This will change soon, as Volkswagen announced on Friday (May 29) it would increase its stake in the joint venture from 50 to 75 percent, a €2 billion ($2.2 billion) financial effort that is only the beginning of the expansion in China.

Since most of its future relies on electric vehicles, Volkswagen also needs to get its hand on accessible hardware for them, especially batteries. To get easy access to these, the Germans also said they would become the largest shareholder in a local battery manufacturer that goes by the name Gotion High-Tech.

“The partnership is an opportunity for Volkswagen to achieve deeper know-how in the field of batteries. Gotion maintains various current and future projects over the entire battery value chain from sourcing, development and production to recycling,“ the carmaker said in a statement.

“Gotion is in the process of becoming a certified Volkswagen Group battery supplier in China, including supplies for local MEB vehicles.”

The aggressive move in China is backed by estimates that by 2025 the demand for electric vehicles there would have reached 1.5 million cars, making the country the largest market for electricity-powered cars.

The more intense partnership with JAC will see the addition of 5 new models to the lineup by the middle of the decade, but also a brand new “full-scale e-model factory.”
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About the author: Daniel Patrascu
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Daniel loves writing (or so he claims), and he uses this skill to offer readers a "behind the scenes" look at the automotive industry. He also enjoys talking about space exploration and robots, because in his view the only way forward for humanity is away from this planet, in metal bodies.
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