Volkswagen sets to be best ‘electric’ brand in China

... pushes battery partners to build Gigafactories

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Volkswagen, VW, is pushing to be the “number one” for electric mobility in China.

This was made known at a press conference in Shanghai by recently appointed Chief, Herbert Diess.

Deiss revealed the car maker will build and launch a fully electric vehicle for Chinese consumers by 2021. It will see the brand take on market leader Tesla in a region where electric cars are being given greater support by authorities.

“China emerged as a powerhouse of the automotive industry,” Diess said.

“We plan to produce more than 22 million electric cars in the next 10 years.

“As a brand, we want to be number one in terms of electric mobility in China and beyond.”

He said half of the brand’s engineers are working on products for the market and that will see it invest more into research and development for the country.

According to TheDrum, VW is also considering a number of partnerships and joint ventures to expand its footprint, Deiss said.

VW delivered a record number of vehicles to Chinese mainland and Hong Kong consumers last year, with deliveries up 0.5% to 4.21 million.

Any advertising uptick as a result of the renewed focus on its electric models will benefit Cheil Greater China, which was the winner, following an eight-month global review of its agency roster which concluded last November.

VW is hoping to improve its marketing efficiency by about 30% by 2020 while keeping its global marketing budget at about €1.5bn.

In the meantime, Volkswagen is pushing its joint venture partners including SK Innovation (SKI) to build electric car battery plants which have at least one Gigawatt manufacturing capacity, Chief Executive Herbert Diess told journalists

“Anything below that amount would make little sense,” Diess said on the sidelines of the Shanghai Auto Show on Sunday.

Volkswagen will buy 50 billion euros ($56.57 billion) worth of battery cells for electric cars and has identified South Korea’s SKI, LG Chem and Samsung SDI as strategic battery cell suppliers as well as China’s Contemporary Amperex Technology Co Ltd (CATL).

The German automaker is retooling 16 factories to build electric vehicles and plans to start producing 33 different electric cars under the Skoda, Audi, VW and Seat brands by mid 2023.

“We are considering an investment in a battery manufacturer in order to reinforce our electrification offensive and build up the necessary know-how,” Volkswagen said.

SKI is building a battery cell manufacturing plant in the United States to supply Volkswagen’s plant in Chattanooga, Tennessee.

SKI will supply lithium-ion battery cells for an electric car that Volkswagen plans to start making in Chattanooga in 2022.

LG Chem, Samsung and SKI on will also supply battery cells for Volkswagen in Europe. CATL is the automaker’s strategic partner for China, and will supply batteries for its electric fleet from 2019.

Yetunde Adegoke

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