Volkswagen will be able to build 1 million electric vehicles (EV) a year in China in 2023, boosted by a new plant in east China's Anhui Province, CEO of the Volkswagen Passenger Cars brand Ralf Brandstaetter told Nikkei on Wednesday.

A joint venture with China's Anhui Jianghuai Automobile Co (JAC), the plant is expected to produce 300,000 electric cars a year, starting in 2023. 

Together with production from two other joint venture plants – one with FAW Group and one with SAIC Motor – this should bring total capacity to the 1 million mark, Brandstaetter said.

The German automaker has seen rapid growth in the sale of its ID series EVs in China since its launch in March 2021. Volkswagen's ID series reported a 70,625 annual delivery despite missing its goal of selling 80,000 to 100,000 cars last year. Regional COVID-19 outbreaks and chip-related issues are said to have contributed to the figures.

China's EV market soared in 2021. Total sales went up by 160 percent year on year to 3.52 million units, ranking first worldwide for seven consecutive years, the Ministry of Industry and Information Technology reported in January.

China's red-hot NEV sector has attracted a growing number of domestic and overseas companies, including homegrown NIO and XPeng and U.S. leader Tesla, which reported strong sales in 2021 and are expanding their manufacturing capacity in the country.

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Handset maker Xiaomi in November 2021 also announced setting up an NEV factory in Beijing.

Brandstaetter is due to take over Volkswagen's China business from August 1. Under his watch, the carmaker will ramp up local development in China, Brandstaetter told Nikkei.

"In the past, our approach was to develop in Germany and localize in China," he was quoted as saying. "But this approach will be changed significantly by setting up more local resources for R&D, especially for software, to be faster, to be more independent in China."

(With input from Reuters)