Volkswagen Group earmarking $11.8 billion to develop, build China electric cars

Volkswagen Group earmarking $11.8 billion to develop, build China electric cars

German automaker Volkswagen has announced plans to invest €10bn ($11.8bn) in the development of locally produced new energy vehicles in China.

Jochem Heizman, head of the Chinese division of Volkswagen, while chatting with reporters said that in the next three years on the Chinese market debuts 15 "green" models of the company, and by 2025 will represent another 15 electric cars and plug-in hybrid cars.

One of the biggest debacles that Volkswagen is looking to combat is the firmer law and regulation regarding this type of vehicle in China; the local government requires the automaker to pass a certain production quota of an electric vehicle for next year so they can continue to operate in the country.

The recently announced plan will see as many as 40 new electric models launched for the Chinese market.

Volkswagen now has around 10 NEVs already on the market in China, although all are imported models with limited sales volumes, according to a company spokeswoman.

The new regulations, which are created to help deal with urban China's awful air pollution problem, demand electric vehicles to account for up to 8% of vehicle sales and automakers have been scrambling to meet the requirements. Some of these models possess an ability to go up to 400-600 kilometers in a single charge.

In September, China unveiled a comprehensive set of emission rules and delayed a credit-score program tied to the production of electric cars, giving manufacturers more time to prepare for the phasing out of fossil-fuel powered vehicles.

Tsien said both GM (GM.N) and its China joint-venture partners "are working to at least meet, if not exceed, those credit mandate requirements".

The Volkswagen group believes that its group companies and joint venture partners in China will generate enough NEV sales to meet quotas by 2019.