Volkswagen plans to build a new electric vehicle (EV) plant in the city of Hefei in China’s Anhui province to meet growing demand for electric vehicles.
The new US$3bn plant will be built by Volkswagen (Anhui) Automotive Company, the joint venture with Anhui Jianghuai Automobile Group Holdings which was renamed immediately after the German automaker took management control of the company in early December after raising its stake from 50% to 75% at a cost of EUR1bn. The joint venture will be fully consolidated in the Volkswagen Group operating results.
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The plant is scheduled to be completed by the end of 2022 and the company said it would become a new global centre for competence and a global e-mobility hub. It will produce vehicles based on the VW Modular Electric Drive Matrix (MEB) platform from 2023.
The new factory will have an annual production capacity of 350,000 electric vehicles per year which will help the automaker meet its target of selling 1.5m electric and plug in hybrid vehicles per year in China by 2025.
Volkswagen’s other Chinese joint ventures, with SAIC-Volkswagen and FAW-Volkswagen, have a combined production capacity of 600,000 vehicles based on the MEB modular platform which means that additional capacity will be needed by the company if it is to meet its 2025 target.
Volkswagen CEO Herbert Diess said in a statement: “Volkswagen Anhui is a promise for stronger partnership and e-mobility power in China. Within the next three years, we can expect MEB production and new full electric portfolio and technology solutions from its R&D centre in Anhu.” He added “Volkswagen Anhui will strengthen China’s role in the electrification and digitalisation of the VW Group.”
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By GlobalDataThe company also inaugurated a new Research & Development (R&D) centre in Hefei which is expected to employ 500 engineers.
Volkswagen Group China CEO, Stephan Woellenstein, said “with our commitment to Volkswagen (Anhui), we will fully leverage the global synergies of the group to intensify our e-mobility strategy in China and help us achieve net carbon neutrality by 2050. Through this new R&D centre, we will strengthen the local expertise and production efficiency of Volkswagen (Anhui), which will play a key role in rapidly growing and optimising our NEV portfolio to address the differing needs of Chinese customers in what is the world’s largest NEV market”.
In a statement the company said “in Hefei, R&D, quality assurance, simultaneous engineering and full capability pre-series manufacturing and testing will all be united in one facility, with integration across the industrial value chain. By combining these key functions and by using the MEB platform, VW will speed up development cycles and allow for significantly faster time to market for new products”.
Woellenstein added “at Volkswagen, we appreciate the further opening up of the country which allows for us to accelerate our transformation towards e-mobility”.
Volkswagen has begun to establish a supplier park near to the proposed EV factory in Hefei and earlier this year the company acquired a stake in Hefei-based EV battery supplier Gotion. The automaker also said it plans to establish a digital hub in Anhui to “support future connectivity and digital services across the group’s portfolio”.
See also: VW inaugurates R&D centre for e-mobility in China
