Wolfsburg based German car manufacturer Volkswagen AG (VW) is finalizing strategic investments worth $2.33 billion in two distinct Chinese electric vehicles (EV) players.
VW will invest $1.11 billion to gain a 50% share in the Chinese parent organization of Anhui Jianghuai Automobile Group (JAC Motors). The organization is also raising its current electric vehicle joint venture with JAC to 75% from previously held 50%. The joint venture is expected to launch five more electric models by 2025 and build a car production facility.
In a different deal, Volkswagen AG will acquire 26.5% in Chinese EV battery manufacture Guoxuan High-tech Co Ltd by spending $1.22 billion in the organization, making it the biggest shareholder in the organization. Guoxuan which is also based in Hefei like JAC will provide batteries to its EV models in China.
Volkswagen is in definitive discussions to invest in the two companies. The firm is interested to improve its situation as the largest foreign automaker in China even as the regional authority’s actions to manage the coronavirus epidemic has damaged business sales.
American automaker Tesla became the first foreign automaker to completely own a car plant in China last year.
Shares in JAC and Guoxuan escalated their highest daily limit of 10% after the report.