Volkswagen begins operations at its first wholly owned battery factory in China

German automaker Volkswagen has begun operations at its first wholly owned battery factory in China. The announcement was made today by the authorities in Hefei, in the eastern province of Anhui, where the plant is located. Volkswagen will also begin mass production there by the end of this year of all-electric models based on the MEB platform, Reuters reported, citing a statement from the municipal government.

In the past, Western companies in China generally operated only through joint ventures with Chinese companies. The total investment in the battery factory, which Volkswagen is now beginning to operate, amounts to 1.5 billion yuan (CZK 4.7 billion).

Volkswagen, which also owns Škoda Auto, has had a long-standing presence in China. Chinese media reported in August, citing their sources, that Volkswagen was in talks with Chinese startup Zhejiang Leapmotor Technology about cooperating on the Volkswagen Jetta brand. In July, Volkswagen and Chinese automaker Xpeng announced a partnership to jointly develop electric vehicles on the Edward platform developed by Xpeng. The Chinese automaker used it as the basis for its Model G9.

Reuters reported last December, citing an interview with Škoda CEO Klaus Zellmer, that Škoda Auto was considering withdrawing from the Chinese market and would decide on the matter this year. The Czech automaker acknowledged at the time that discussions were underway about its future direction in the Chinese market.