Autos

Report: Volkswagen plans to invest billions in electric car and battery manufacturers in China

The German auto group Volkswagen, which is already on the Tesla course with pure electric car platforms and a model offensive, wants to drastically expand its involvement in this area with investments in China. The Reuters news agency reports, citing informed people. Two transactions could therefore be officially announced this week. On the one hand, Volkswagen wants to secure 50 percent of the mother of the existing electric car partner JAC Motors. On the other hand, a stake of 27 percent in the battery manufacturer Guoxuan High-tech is expected.

Volkswagen is going offensive like Tesla

China has been the growth focus for the classic car industry for years anyway, and the situation is increasingly different for electric cars – also because their production and sales have been promoted there for years. Tesla is investing in the massive expansion of its Chinese Gigafactory and plans to increase capacity to 4000 Model 3 per week in the first half of the year; Another plant for the Tesla Model Y is scheduled to be completed in the first quarter of 2021.

With the reported investments in the pioneering market, Volkswagen and Tesla seem to be trying to go on the offensive despite the corona virus crisis. In addition, the German group, like before, BMW and Tesla, is taking advantage of the new opportunity for foreign companies in China to keep control of plants in the country.

According to Reuters, Volkswagen’s first goal is a 50 percent stake in Anhui Jianghuai Automobile Group Holding that will cost at least $ 491 million. The state-owned company owns 25.23 percent of the JAC Motors joint venture, 50 percent of which is already owned by Volkswagen. With the new stake in Anhui Jianghuai, the Germans would secure a majority stake in the manufacturer, which already offers several electric cars on the Chinese market. After the takeover, VW wants to provide additional capital for JAC and thus increase the production capacity on its electric car platform MEB, according to Reuters.

Entry into battery production before Tesla

In addition, according to the report, Volkswagen plans to buy 27 percent of the Chinese battery manufacturer Guoxuan High-tech; the current value of this share according to market prices is estimated at 1.16 billion. The company is significantly less well known than the market leader and Tesla partner CATL, but according to Automotive News it is the third largest battery producer in the country, but with only a 5 percent market share after CATL and BYD.

There had already been reports of Volkswagen’s interest in buying earlier this year. At that time, however, there was talk of a significantly lower price of $ 560 million for a share of 20 percent. The German group’s entry into (almost) its own battery production comes, if it is confirmed, earlier than Tesla’s previously announced, which should, however, be of a significantly larger extent. But apparently Volkswagen could have saved a lot of money if the decision had been made faster.

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