Volkswagen Sets Aside $11.8 Billion to Build EVs in China

Matt Posky
by Matt Posky

When we were told the electric revolution was on its way, most of us probably assumed at least some of that vehicular renaissance would take place outside of China. But Asia is where all the hot EV action lives, so that’s where the money goes.

Volkswagen, now promising one of the industry’s most ambitious pushes into electrification, plans to invest $11.8 billion through 2025 to develop and manufacture all-electric and plug-in hybrid vehicles in China, as the nation’s emission mandates become progressively more stringent.

China chief Jochem Heizmann told Reuters Volkswagen and Audi plan to launch 15 “new energy vehicles” over the next two to three years, and an additional 25 after 2025. However, he was less precise on which roads those vehicles would do the majority of their driving. Presumably, they’ll be in China, with whatever models that might be marketable in the West heading in that general direction.

The Chinese mandate that a certain percentage of new car sales must be electric is set to take effect in 2019, resulting in numerous automakers trying ensure they’ll meet the quota by investing in the country and shifting product toward electrification. Viewed as a major growth market in the years to come, no company with a foothold in the region wants to be left behind (or forced to buy government credits because it fell short in EV sales).

“We need high volumes of new energy vehicles,” Heizmann said. “We are working on full speed on that.”

At present, Volkswagen Group only has about a dozen EVs on the Chinese market. But those models are all imported and limited in volume, as China also limits in-country sales for foreign manufacturers without a domestic production partner. VW intends to sell 400,000 new energy vehicles annually in China by 2020 and 1.5 million per year by 2025.

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • Asdf Asdf on Nov 16, 2017

    Since Chinese-built EVs will be impossible to sell in Europe and the US, they're likely to be built in China for the Chinese market only.

    • See 1 previous
    • Asdf Asdf on Nov 17, 2017

      @th009 Only provided that they're not assembled mainly from Chinese parts, in which case they'd still be Chinese-made.

  • CKNSLS Sierra SLT CKNSLS Sierra SLT on Nov 16, 2017

    Everybody is jumping on the "EV bandwagon" but Tesla doesn't have any issues and will be successful. Can't believe there are those that still believe that. This technology or even the vehicles themselves might make it to North America.

    • See 2 previous
    • Mcs Mcs on Nov 17, 2017

      @mcs Just saw the price of the roadster reservation. It's $250k for the founder's series and $50k for a standard reservation. I like the car, but even though they are saying 2020, we all know that potentially means 2022 or later. There's no way I'd tie up $50k for potentially 5 years. I'll wait and see and take my chances and order when it's actually in production and see what kind of car Porsche responds with.

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