Volkswagen Building New EV Battery System Factory In China

Volkswagen AG said on Thursday it is building a new electric vehicle (EV) battery system factory in eastern China’s Hefei city which will start production in 2023.

The German automaker is building a factory for electric vehicles under a majority-owned venture with JAC in the Hefei city. It also holds a stake in the EV battery maker Gotion which is also based in Hefei.

It said it would invest more than 140 million euros ($164 million) in the battery plant by 2025. The factory’s initial capacity will be 150,000 to 180,000 battery systems a year for local EV production.

Volkswagen rolled out five ID. series electric models in China, the world’s biggest car market, this year. It sold around 7,000 such vehicles there last month and aims to deliver 80,000 to 100,000 units in total this year.

Reuters reported last week, citing people familiar with the matter, that Volkswagen is in talks to tighten its grip on the Hefei venture, sparking tensions with its other Chinese partners who fear they could be sidelined.

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(Reporting by Yilei Sun and Brenda Goh; editing by Jason Neely and Emelia Sithole-Matarise)