VW Vows to Stay Ahead as China EV Revolution Gathers Pace

A Volkswagen logo is pictured in a production line at the Volkswagen plant in Wolfsburg. Photo: Reuters

German auto giant Volkswagen has vowed to keep its foot on the gas in China as the pace of electrification speeds up, despite intensified competition and weak demand.

A senior VW AG China executive reiterated on Saturday the German automaker’s commitment to the world’s second largest economy.

VW plans to increase the number of charging posts for electric vehicles in China to 17,000 by 2025, as it plans to invest 15 billion euros ($16.26 billion) in the country on electric mobility together with its three joint ventures by 2024, Stefan Mecha, chief executive of the Volkswagen brand in China, told China’s EV 100 forum in Beijing.

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“The market is flush with new, highly competitive players but strong competition simply motivates us to constantly innovate and improve,” Mecha said.

He added that despite softer short term demand in China, the company is confident that there would be a recovery.

In February, Chinese electrified vehicle maker BYD outsold the Volkswagen-branded cars to be the best-selling passenger car brand in the world’s largest auto market for the second month in four.

Mecha also urged China to extend a purchase tax exemption on new energy vehicles (NEVs), which include both pure electric and plug-in hybrid cars, beyond this year as part of the policy support for the sector.

In September, China extended the tax exemption on such vehicles by a year to the end of 2023.

The government is studying policies to promote auto consumption and eliminate backward automakers as China’s NEV market faces challenges of weak domestic demand, Xin Guobin, vice minister at Ministry of Industry and Information Technology, said at the same forum.

Xin also urged the industry to enhance capabilities in securing supplies of metals such as lithium, cobalt and nickel as it also faces threats of global trade protectionism.

Reuters with additional editing by Sean O’Meara

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Sean O'Meara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.