VW rumoured to build its first battery plant in China image

In its quest to reshape its long-term strategy, Volkswagen is determined to push for electrification and China may by the first country for the automaker to build batteries plants.

Volkswagen promised to launch the biggest change process in its history, a strategy that includes the launch of more than 30 purely battery-powered electric vehicles over the next ten years, estimating that such green models could then account for around a quarter of the Group’s global passenger car sales, equivalent of around 2-3 million units. To hit this target and to be cost effective as well, the company will definitely have to produce its own batteries and China seems the right country for such an investment. A source close to senior management told Bloomberg that “China is likely one of the first, since we think electromobility will catch on there as a trend much sooner given the government’s relentless push.”

One of the strongest reasons behind such a move would be the fact that Volkswagen already has two joint ventures in the country – Shanghai Automotive and FAW – and building a plant for battery cells and packs would require just half of the total investment due to laws that stipulate that a limit of 50 percent is mandatory for foreign-owned automakers. China, which is expected to soon become the biggest auto market for electric vehicles, has committed to curb pollution and to support investment in green technologies, aiming also to have five million alternative-fueled vehicles on the roads by the end of the decade.

Via Bloomberg