Volkswagen Invests 2.1 Billion Euros in Chinese Electric Vehicle Company

[Image source=AP Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] German automobile manufacturer Volkswagen announced that it will invest 2.1 billion euros (approximately 2.8 trillion KRW) in two Chinese companies: an electric vehicle company and a fuel cell company. This investment is expected to be the largest ever for Volkswagen in Chinese electric vehicle-related enterprises.

According to foreign media such as The New York Times (NYT), Volkswagen will invest 1 billion euros to acquire a 50% stake in Anhui Jianghuai Automobile Group, a Chinese electric vehicle joint venture partner, and invest 1.1 billion euros to purchase a 26.5% stake in Guoxuan, a fuel cell electric vehicle company, totaling an investment of 2.1 billion euros.

Volkswagen plans to increase its electric vehicle joint ventures by launching five additional electric vehicle models by 2025 and establishing new electric vehicle manufacturing plants. It is expected that Volkswagen will be able to manufacture and sell approximately 1.5 million eco-friendly vehicles annually in China, including pure electric vehicles, hybrid vehicles, and hydrogen fuel cell vehicles.

This investment targets the rapidly expanding Chinese automobile market and is known to be a response to competitors such as Tesla entering the Chinese electric vehicle market. Approximately 2.2 million electric vehicles were sold worldwide last year, with over 60% of those sales occurring in China. Demand for electric vehicles in China is expected to grow to over 10 million units by 2025.

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