Manufacturing News

VW breaks ground for EV plant in Shanghai

Volkswagen Group has begun building a plant at its joint venture with SAIC Motor Corp. in Shanghai as part of its plan to produce electric vehicles locally for China.

The 17 billion yuan ($2.5 billion) factory is to start production in 2020. It will make vehicles based on VW’s MEB platform for EVs.

The plant, capable of producing 300,000 vehicles annually at full capacity, will build EVs and battery systems for the Volkswagen, Audi and Skoda brands, VW said.

The factory’s first EV will be a Volkswagen-badged SUV, which is to arrive in China in 2020.

The new plant at SAIC-VW will be VW’s second production site for EVs derived from the MEB platform.

In June, the German auto giant completed expansion of the plant it runs with China FAW Group Corp. in the south China city of Foshan, doubling the factory’s annual production capacity to 600,000 vehicles.

The expansion will enable the Foshan plant to start assembling MEB-based EVs and battery systems for the VW and Audi brands in 2020.

VW has built vehicle assembly plants across China with SAIC and FAW. The existing plants can produce 5.15 million vehicles a year at full capacity.

In the first nine months of this year, VW and its joint ventures with FAW and SAIC delivered 3,309,800 vehicles in China, a 5 percent increase from the same period last year.

Despite the huge production capacity it has constructed, the German automaker has yet to start producing EVs under its proprietary brands in China.

The Chinese government plans to implement a carbon credit program, which is essentially a quota system, in 2019 to force automakers to ramp up EV output.

To comply with the regulatory requirement, VW formed an EV partnership with Jianghuai Automobile Co. last year while preparing to introduce MEB-based EVs at its joint ventures with SAIC and FAW.

The new joint venture, JAC VW, has annual capacity of 100,000 vehicles. It launched production in May in the east China city of Hefei.

JAC VW will market EVs under its Sol brand. Its first product, the Sol E20X subcompact crossover, is to go on sale in China this year.

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