VW to invest $12 billion in electric cars in China

Business & Technology

Volkswagen (VW) has become the latest Western car company to invest aggressively in electric vehicles in China, following China’s announcement in September that it would ramp up new energy vehicle (NEV) quotas and completely phase out gas-powered cars in a matter of decades.

  • The German manufacturer will spend $12 billion by 2025 to introduce 40 locally produced vehicles, Bloomberg reports.
  • This follows an earlier commitment, worth $24 billion, by the company to “build electric versions of all 300 models in the 12-brand group’s lineup.”
  • VW has multiple partners in China that will build the vehicles, but a significant one is the state-owned Anhui Jianghuai, with which a joint venture agreement was greenlighted by the government in May.
  • Ford last week made a $753 million investment with its partner Anhui Zotye Automobile to “make and sell small electric cars in China.”
  • In October, Tesla also negotiated its way into building a wholly owned factory in Shanghai for its own electric vehicles for the Chinese market.

As China pushes the electric vehicle market forward, drawing in these massive foreign investments, the Trump administration is ironically driving backward on electric vehicles, the New York Times reports (paywall). As part of the Republican Party–led tax bill, representatives are “pushing a repeal of the electric car tax credit, which could equate to about $200 million in the coming years,” the Times notes. China is “far ahead” on innovating in electric cars, one industry observer said, while General Motors’ president affirmed his belief that “ultimately…the whole world will go” in the direction of electric vehicles.