China's FDG Electric Vehicles began construction this week of a new manufacturing hub for new energy vehicles (NEVs) in the country's southwestern province of Sichuan.

The company aims to tap into fast-growing local demand for NEVs, particularly electric and hybrid vehicles, driven by favourable government policy including incentives and minimum sales quotas scheduled to come into effect in 2019.

The company said the CNY16bn (US$2.54bn) investment will be made in two phases, to which will ultimately generate an annual production capacity of 400,000 vehicles per year.

The investment, in the city of Jianyang, will also include a manufacturing plant capable of producing lithium-ion batteries with a total power output of 4 gigawatt-hours.

The first phase of the project is expected to be completed in 2019. The initial CNY4bn investment will establish an annual capacity of 100,000 NEVs per year and lithium-ion plant capable of producing 1 gigawatt-hour of batteries per year – generating annual revenues of CNY20bn.

The China Association of Automobile Manufacturers expects sales of NEVs in China to increase from 777,000 units in 2017 to around 1m units in 2018 and 2m by 2020. By 2025 it expects NEVs to account for 20% of total vehicle sales in the country.

Auto market intelligence
from just-auto

• Auto component fitment forecasts
• OEM & tier 1 profiles & factory finder
• Analysis of 30+ auto technologies & more