Manufacturing News

VW earmarks 77 billion yuan to develop, build EVs for China

Volkswagen Group plans to spend 10 billion euros (77 billion yuan) by 2025 to develop all-electric and plug-in hybrid vehicles as it seeks to comply with stringent environmental rules in China.

VW intends to launch 15 electric models over the next two to three years, and an additional 25 after 2025, China chief Jochem Heizmann told Reuters on Thursday.

VW’s venture with Anhui Jianghuai Automobile Group will start EV output in the first half of next year, while sales will start in the second half.

China's EV production and sales quotas, which must be met by 2019, have prompted a flurry of EV deals and new launches as automakers in China race to meet the targets. Automakers that fall short will be required to buy credits.

Volkswagen already has 10 EVs on the market in China although all are imported models with limited sales volumes, according to a company spokeswoman.

Volkswagen also plans to start building the electric Golf in China next year.

Heizmann, speaking ahead of the Guangzhou auto show, added that the group is aiming to sell 400,000 EVs per year in China by 2020 and 1.5 million per year by 2025.

Heizmann said some of those models will have a driving range of 400 km to 600 km on a single full charge. By comparison, Tesla's Model S has a range of 490 km and as much as 632 km depending on battery capacity, according to the company.

VW is also confident that its group companies and their local China joint venture partners will generate enough sales volume to account for EV quotas by 2019, Heizmann said, adding that there will be no need to buy credits.

"We need high volumes of [electric] vehicles... we are working on full speed on that."

Last week, General Motors' China chief Matt Tsien told reporters that the company will generate enough sales volume to meet the EV quotas by 2019.

Tsien said GM and its Chinese joint-venture partners "are working to at least meet, if not exceed, those credit mandate requirements."

The Guangzhou auto show starts on Friday.

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