Volkswagen’s $17 Billion EV Plan for China Rolls On
Volkswagen Group reiterates that it’s all-in on the China’s “new-energy” vehicle market.
The German company and its three Chinese partners—FAW Group, Jianghuai Automobile (JAC) and SAIC Motor—confirm they will spend $17 billion to launch 15 plug-in hybrid and all-electric models by 2025.
That investment target isn’t new, but the timeline has shifted. The companies said two years ago they would spend more than $17 billion by 2022—to introduce 40 locally built hybrids and all-electric models by 2025.
All of the new models from now on are to employ VW’s flexible MEB platform, which was designed specifically for electric powertrains. But the partners began their EV push before that chassis came along.
It began in 2017, when VW and JAC launched a 50:50 venture to make hybrid and all-electric cars for the Chinese market, including SEAT-branded vehicles and local-market models under the new Sol brand.
China-built Sol E20X electric crossover (Image: VW)
The companies began making the electric Sol E20X small crossover, which rides on a JAC platform, two years ago. In May, VW said it would spend $2.3 billion to raise its ownership in the partnership to 75%. The venture is opening an R&D center in Hefei, building an EV factory and hopes to achieve annual output of 100,000 battery- and hybrid-powered vehicles.
Here Comes MEB
The first of the China-built EVs to use the MEB chassis are launching now, beginning with the Golf-like ID.3 small car. The larger ID.4 crossover is due in 2021. Before the coronavirus pandemic began, VW was aiming for sales of 300,000 electrified vehicles in China this year, rising to 1 million by 2025.
VW’s ID.3 electric 5-door
Last November, VW and SAIC began pilot production of electrified vehicles at a new, $2.5 billion factory in Shanghai. The facility reportedly will make EVs for the German carmaker’s Audi and VW brands.
Automobilwoche reports that VW Group’s Audi unit is expected to finalize a deal by year-end with FAW to form a new company to make electrified cars. The newspaper speculates that the venture will begin by building electrified variants of the Audi A6 midsize sport sedan and Q5 midsize crossover.
What It All Means
VW has said since early 2018 that it aims to become the world leader in EVs. The company been backing up that claim with increasingly heavy investments in electrification. Its spending in China underscores its determination, bigtime.
Yes, there is a Polestar 1. But it is a hybrid, not an electric vehicle (EV). The Polestar 2 is the company’s first EV—the first of what promises to be many
Sandy Munro and his team of engineers and costing analysts at Munro & Associates were contacted by UBS Research—an arm of the giant banking and investment firm—and asked whether it was possible to do a teardown and cost assessment of the Chevrolet Bolt EV.
The historic plant has built—and is building—a lot of cars in its 70-year run of commercial vehicle production. Today, with the e-Golf and the GTE, it is making what are arguably the most-advanced Volkswagens out there.