VW spending big to meet China electric car mandate

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Volkswagen Group plans to spend 10 billion euros (11.8 billion US dollars) by 2025 to develop and manufacture new-energy vehicles (NEVs), the group’s China chief Jochem Heizmann told media on Thursday.

China has set stringent production quotas for NEVs which automakers must meet by 2019, a move that is prompting a flurry of electric car deals and new launches of battery electric and plug-in hybrid models as automakers in China race to ensure they do not fall short.

Volkswagen Group includes Volkswagen AG and Audi AG.

Financial Times Photo

Heizmann said the group is confident that its companies and their local Chinese joint venture partners will be able to generate enough NEV sales volume to account for the quotas by 2019 and will not need to buy credits.

The new Chinese rule mandating a boost in electric vehicle production is raising fears of a glut of battery-powered cars that carmakers will be hard pressed to sell, the Financial Times reported on Monday.

Chinese carmakers will have to manufacture a certain number of EVs starting in 2019 to offset combustion engine cars they produce, or else buy credits. /CGTN Photo

Under regulations published in September, carmakers will have to manufacture a certain number of NEVs starting in 2019 to offset combustion engine cars they produce, or else buy credits. The rules won’t be enforced until 2020.

They also impose targets for fuel economy compliance on manufacturers.

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Source(s): AP ,Reuters