File picture: Arnd Wiegmann / Reuters.
INTERNATIONAL - Volkswagen (VW) will invest more than 10billion (R168bn) with its partners to make and develop a range of new-energy vehicles in China as car manufacturers step up investments in low-emission models in the world’s biggest vehicle market.

VW will make the investments by 2025 and introduce 40 locally produced vehicles, its China head Jochem Heizmann told reporters in Guangzhou yesterday.

The European car maker’s venture with Anhui Jianghuai Automobile Group will start production of electric vehicles in the first half of next year, while sales will start in the second half.

The German manufacturer joins Ford Motor in boosting investments in electric-vehicle development in China as the country will require most vehicle manufacturers to produce various types of zero- and low-emission vehicles.

The China plans are part of a broader push by VW, which in September announced a 20bn plan to build electric versions of all 300 models in the 12-brand group’s line-up.

VW shares, which have largely recovered from the diesel-cheating crisis, yesterday rose 1.2 percent to 158.40 at 9.05am in Frankfurt trading.

In May this year, VW received a green light from the government to set up a joint venture with the state-owned Anhui Jianghuai manufacturer to produce electric cars.

The Wolfsburg, Germany-based company sold 2.5million vehicles in China in the first 10 months.

VW has previously said it plans to sell 400000 new-energy vehicles a year by 2020 and increase that number to 1.5million by 2025.

Last week, Ford said it will invest 5billion yuan with partner Anhui Zotye Automobile Company to make and sell small electric cars in China.

VW will introduce 15 models based on its MQB platform, converting internal combustion engine cars into plug-in hybrid or pure-electric versions, said Heizmann.

The rest of the models will be developed on new platforms, he said.

Credit score

In September, China unveiled a comprehensive set of emission rules and delayed a credit-score programme tied to the production of electric cars, giving manufacturers more time to prepare for the phasing out of fossil-fuel powered vehicles.

Under the so-called cap-and-trade policy, car makers must obtain a new-energy vehicle score - which is linked to the production of various types of zero- and low-emission vehicles - of at least 10percent starting in 2019, rising to 12percent in 2020, according to the Ministry of Industry and Information Technology.

“The new adjusted quota policy is really the right thing,” Heizmann said.

By delaying the implementation year to 2019 and allowing car makers to combine credits in 2019 and 2020, it’s no longer a major challenge for VW to fulfil the demand, said Heizmann.

It’s a tough target for VW to achieve the average fuel consumption level of the fleet at 5 litres per 100km by 2020 and the vehicle manufacturer is looking at all technologies to improve fuel-consumption efficiency of internal-combustion engine vehicles, he said.

Electric cars will outsell fossil-fuel powered vehicles within two decades as battery prices plunge, turning the global auto industry upside down and signalling economic turmoil for oil-exporting countries.

The Bloomberg New Energy Finance forecasts that the adoption of emission-free vehicles will happen more quickly than previously estimated because the cost of building cars is falling fast.