German automobile manufacturer Volkswagen has decided to throw its hat into the electric vehicle (EV) market, planning to launch up to 40 models in China by 2025, China Money Network reports.
Some of these EV models might make it to company launch by early 2018, according to Volkswagen China’s head, Jochem Heizmann. A couple of months ago, the company announced a goal to invest as much as $24 billion in these carbon emission-free vehicles.
The investment served as a viable follow-up to recent ventures that the German manufacturer has cornered in this side of East Asia. Back in May, it earned a permit to develop electric cars along with state-owned vehicle manufacturer JAC Motors. A similar deal was secured by Volkswagen earlier with other China-based manufacturers, namely SAIC Motor Co., Ltd., and FAW Group Corp.
The joint venture with JAC Motors is set to begin production of its first batch of prototypes come first half of 2018. Matthias Mueller, Volkswagen AG’s chief executive, confirmed in the report the company’s plan to sell as many as 1.5 million electric cars in the Mainland by 2020. This is consistent with China’s reported goal of eliminating vehicles dependent on fossil fuels and move towards EV models. The program, while not mentioning an actual deadline for the carbon emission levels to be lowered, kicked off in September.
In order to achieve the goal of turning all vehicles running in China to new energy sources, the Chinese government has required manufacturers “to have electric cars or plug-in hybrid cars account for 2% and 4% of their total output respectively” as part of the state-mandated new energy vehicle credit system based on the system of buying credits to make up for the carbon emissions produced. The report used the term “clampdown” when referring to its efforts to eliminate fossil fuel-dependent vehicles.
Volkswagen AG, on the other hand, seemed to be chasing its self-imposed deadline as well. According to Bloomberg, the quest for cobalt sources is on. Cobalt is noted as one of the most in-demand metals due to its viability as a material needed to create electric car batteries. Volkswagen AG has viewed this as a long-term initiative to the point that it has allegedly “relaxed demands for offers at a discounted fixed price” to source the mineral.
Cobalt’s reputation as far as electricity conduction attributes are concerned have made it the preferred raw material for rechargeable batteries. As Volkswagen AG’s investment in China now awaits its next move, it is reported to be one of the companies with its sights on suppliers coming from the Democratic Republic of Congo for long-term purchases, with goals of investing up to $40 billion within five years.
Volvo will face some competition in China, with Ford partnering with China-based manufacturer Anhui Zotye Automobile Co., Ltd., and Groupe Renault pairing up with Nissan Motor Co., Ltd., to seal a deal with China’s Dongfeng Motor Group to produce their own electric vehicles.
Stay up-to-date with the latest commentary and insights on FreightTech and the impact to the markets by subscribing.