Volkswagen accelerating electric efforts

Volkswagen is stepping up its electrification efforts to meet the demand for new-energy vehicles in China.

The German automaker is to set up a new research and development center for competence in e-mobility, it announced on Tuesday.

It has renamed joint venture JAC Volkswagen as Volkswagen Anhui following the closure of a deal which sees the company’s shareholding rise to 75 percent.

Volkswagen Anhui’s future products will be based on Volkswagen Group’s new modular electric vehicle platform, known as MEB. The first electric vehicle is expected to roll off the Anhui production line in 2023.

Herbert Diess, CEO of Volkswagen AG said: ”Volkswagen Anhui is a promise for stronger partnership and e-mobility power in China. Within the next three years, we can expect state-of-the-art MEB production, a new full-electric portfolio and technology solutions from its research and development center in Anhui. This year’s investment of around 1 billion euro （US$1.21 billion) accelerates the progress within the joint venture. Volkswagen Anhui will strengthen China’s role in the electrification and digitalization of the Volkswagen Group.”

Through the new research and development center, the company will strengthen local expertise and production efficiency to play a key role in growing and optimizing its new-energy vehicle portfolio to address the needs of Chinese customers in the world’s largest market.

Volkswagen already has a plant in Auhui for production of vehicles. The second phase will start in 2021, with the expansion of infrastructure and equipment for the production lines, plus the building of a battery workshop as well as a vehicle and component validation workshop.

The full-scale factory for pure-electric vehicles, with a maximum production capacity of 350,000 units per year, is due to be completed by the end of 2022.

The automaker said it is now recruiting local talent, the majority in research and development, to number around 500 employees by 2025.

Volkswagen recently acquired a stake in Hefei-based battery supplier Gotion, becoming its largest shareholder and is starting talks with both domestic and international suppliers to establish a dedicated supplier park in Hefei.

Volkswagen also aims to establish a digital hub in Anhui to support future connectivity and digital services across the group’s new-energy vehicle portfolio.