
Volkswagen Group has started construction of its electric vehicles plant in a joint venture with SAIC Motor Corp. in Shanghai. The US$2.5 billion factory will start production of electric vehicles based on VW’s MEB platform in 2020.
According to the company update, the plant will build EVs and battery systems for the Volkswagen, Audi and Skoda brands, with a full capacity to produce 300,000 vehicles annually. The factory’s first EV will be a Volkswagen-badged SUV to be launched in China in 2020. The new plant will be VW’s second production site for EVs derived from the MEB platform.
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In June, the Volkswagen Group completed expansion of its plant at south China city of Foshan which it runs with China FAW Group Corp and doubled the factory’s annual production capacity to 600,000 vehicles.
The expansion will enable the Foshan plant to start assembling MEB-based EVs and battery systems for the VW and Audi. VW’s vehicle assembly plants across China in collaboration with SAIC and FAW can produce 5.15 million vehicles a year at full capacity.
In the first nine months of 2018, VW and its joint ventures with FAW and SAIC delivered 3,309,800 vehicles in China, up 5 per cent from the same period of 2017. The German automaker has not yet produced any EVs under its proprietary brands in China and expects to start production soon.
The Chinese government plans to introduce a carbon credit program in 2019 to encourage automakers to ramp up EV output. The governmnets is looking at electric vehicles as a means to control polltion and to utilize its metal overcapacity, especially aluminium. To comply with the regulatory requirement, VW formed an EV partnership with Jianghuai Automobile Co. last year to produce MEB-based EVs at its joint ventures with SAIC and FAW.
The new joint venture, JAC VW, has annual capacity of 100,000 vehicles. It launched production in May in the east China city of Hefei. JAC VW will market EVs under its Sol brand. Its first product, the Sol E20X subcompact crossover will be launched in China this year.
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