Volkswagen goes all-in on EVs for China market

Volkswagen has big plans when it comes to electrification. By 2030, the automaker expects the majority of new vehicles sales to be comprised of EVs, and by 2040, all new vehicles sales in major markets should come from zero-emissions vehicles. Those are just some of Volkswagen's objectives to be carbon neutral by 2050.

One market the German automaker plans on expanding its EV presence is in China. To show how serious they are about the Chinese market, Volkswagen is investing EUR 140 million (PHP 8.335 billion) to build a new battery system plant in the country. The new factory will be located in Hefei in Anhui province and will be the first battery system plant to be wholly owned by the Group in China.

“With a significant increase of battery-electric vehicles (BEVs) in the future, we need to focus on keeping key components like battery systems in our own value chain, allowing us to leverage Group-wide synergies and innovations. Volkswagen Anhui and VW Anhui Components Company, alongside our two strong Joint Ventures, are crucial to our electrification strategy and to achieving our goal of the Volkswagen Group China fleet reaching over 40% NEVs by 2030,” said Stephan Wöllenstein, CEO Volkswagen Group China.

Volkswagen is building a new battery system factory in China image

Construction of the plant is currently ongoing and will occupy over 45,000 square meters. More importantly, it is strategically located next to the vehicle plant to improve logistics and lower costs, leading to faster production of EVs.

The facility is expected to start production in the second half of 2023. Initially, it will have an annual capacity of 150,000 to 180,000 high-voltage battery systems. These will be used by Volkswagen Anhui's future all-electric vehicles that ride on VW's electric MEB platform. The first EV is expected to roll off the neighboring assembly line in 2023 as well.

With Volkswagen pushing for EV production in China, will they be able to go up against the local manufacturers? Also, since Philippine-spec Volkswagen models are sourced from China, it opens up the possibility of these EVs arriving here in the future.