VW Expanding Electric Cars in China
CBJ — Volkswagen is committed to spending almost $2.5 billion to expand its presence in China’s electric car industry.
The investment will give Volkswagen majority control of its electric car venture in China. The company is spending at least another $1 billion to be the biggest shareholder in a battery producer.
Volkswagen is able to take majority control due to a recent change in Chinese government rules. Previously foreign ownership was restricted to less than 50%.
China is the single largest market for electric car sales, accounting for about 45% internationally. However, demand has dropped in 2020 largely due to the pandemic.
Tesla, headed by Elon Musk, is the first foreign brand to set up a wholly-owned venture in China. Other automakers such as General Motors, BMW and Nissan have also moved into China with joint venture opportunities.