Volkswagen Sets Aside $11.8 Billion to Build EVs in China

by Matt Posky

November 16th, 2017 3:22 PM

volkswagen sets aside 11 8 billion to build evs in china

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.

#AudiAG #China #ChineseEvMandate #ElectricCars #ElectricVehicleMandates #Electrification #EVs #Volkswagen #VolkswagenAg #VolkswagenGroup #VW

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7 comments

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.

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- Th009 on Nov 16, 2017
  
  The same models, assembled in the Americas or Europe, might well be palatable. (Of course we have no idea yet what those models might be.)
  
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- 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.
  
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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.

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- Tekdemon on Nov 17, 2017
  
  Nobody is claiming that Tesla doesn't have any issues, but they definitely still have a fairly good shot at disrupting the status quo significantly. It's very clear that it was Tesla made the case that modern EVs can fully replace ICE vehicles with their cars. The big manufacturers will catch up and likely have advantages here but Tesla will have it's advantages too. For example, Porsche's upcoming Mission E will likely handle much better than any Tesla since Porsche is much more experienced in building sports cars. But do you notice that the 0-60 Porsche is willing to claim is very far off from Tesla's 0-60 numbers for a car that's already in production? It's not because Porsche can't put in a bigger EV motor, it's because Tesla is better at building the advanced battery interconnects and power management setups needed to extract that level of power from a battery pack all at once.They're also better at working with the inconel needed on the P100D's battery interconnects, because SpaceX had been working with inconel for rocket use. So traditional car companies will still be better at the stuff they have more experience in, but Tesla has a multiple year head start on most of the EV specific stuff. They won't be the only player in the market but the constant doom and gloom is pretty silly, and just their brand value alone is something most car companies would kill for. I don't own any shares of Tesla by the way, I think the stock is overpriced. But I also think they'll do just fine.
  
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- Mcs on Nov 17, 2017
  
  @tekdemon I think they'll be fine too. The roadster that was unveiled last night is going to have 620 miles range and 0 to 60 of 1.9 seconds. It's probably the first EV to get into ICE range capability. I'm sure there will be more EVs to follow from Tesla and other manufacturers with 400 to 500-mile range capability.
  
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- 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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