Volkswagen AG and Anhui Jianghuai Automobile Group (JAC Motor) have announced receiving approval from Chinese regulators for setting up a joint venture to make electric vehicles.
The investment is expected to be worth 5.1 billion yuan ($740 million) according to a JAC Motor stock exchange filing. The National Development and Reform Commission (NDRC), China’s top state planner, has given approval to the JV between JAC and VW to build 100,000 pure battery electric vehicles (BEVs) annually.
As per a Reuters report, a VW spokesman has confirmed the approval but said certain administrative procedures are still needed to be completed for a joint venture contract to be signed with JAC Motor.
Volkswagen, China's largest foreign automaker, has pledged to rapidly develop a range of EVs as the Chinese government aggressively promotes the segment as a way to cut intense smog in much of the country.
VW already has joint ventures with China FAW Group Corp and SAIC Motor Corp in the country.
As per reports, the company previously said it aims to sell 400,000 "new energy vehicles," a category which includes pure electric and plug-in petrol-electric hybrids, in China by 2020 to meet strict Chinese fuel economy and emissions regulations, with electric vehicles made with JAC Motor coming in addition to that figure.