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Volkswagen may set up battery manufacturing plant in China

Team OD  | Updated: June 28, 2016, 03:15 PM IST

Volkswagen AG may set up its ambitious battery plant in China. The carmaker is reportedly considering China owing to the country's strong emphasis on electric vehicles. What works in China's favour is that Volkswagen has two joint ventures in that country. So Volkswagen will have to fund only half of the required investment while the rest will be given by either Shanghai Automotive and/or FAW. However, it is unclear whether Volkswagen AG is considering to set up one or more battery manufacturing plants.

The Chinese government is encouraging carmakers to introduce more electric vehicles as they will help in reducing the alarming pollution levels. Those vehicles that can travel a minimum of 50km on electric charge will be exempt from the new licence plate allocation limit that is being enforced by the government in major cities. Also, other financial incentives are being provided but these are mainly for those electric vehicles that are locally manufactured.


Volkswagen AG has been considering setting up an in-house own battery factory which is in-line with its plans of expanding electric vehicle portfolio. Currently, the carmaker relies on external companies like Panasonic, LG and Samsung for batteries to power its electric vehicles.

Matthias Muller, chief executive, Volkswagen AG, is reportedly working on a new 'Together - Strategy 2025', which aims to enhance the company's electric vehicle sales to 1 million units in the next decade. The company intends to introduce around 30 new electric vehicles by 2025. To attain this goal, the company also needs to sort out its plans for sourcing the batteries.



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