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All signs point to E

All signs point to E

Electric mobility was a central topic at Auto China. We explain here how energetically China is investing in the e-vehicle market – and how this corresponds to the Volkswagen Group strategy.

China is the largest market for electric vehicles in the world. The Chinese government is making huge investments in electric car infrastructure and creating more than just financial incentives for customers. Particularly in metropolises such as Shanghai, Guangzhou, or Beijing, owners of e-vehicles receive special treatment – from license plates to free parking spaces or permission to drive every day.

Volkswagen Group China is also moving up a gear in terms of developing core technologies of the future. This particularly applies to the implementation of “Roadmap E.” “We, too, are sure that the future is electric,” says Board of Management member for China Dr. Jochem Heizmann. By the year 2025, Volkswagen and its Chinese joint venture partners will invest around 10 billion euros in the industrialization of e-mobility in China. The money will flow into factories, qualification measures, charging infrastructure and, especially, new products.

We, too, are sure that the future is electric.

Dr. Jochem Heizmann Board of Management member for China

The Volkswagen Group relies on a broad range of electric vehicles

“In the coming seven to eight years, we will introduce around 40 new, locally produced “New Energy Vehicles” – plug-in hybrids and purely battery-powered vehicles. We are relying on a broad range, also of electric vehicles, since we aim to achieve a market share similar to the one we have in the combustion engine market,” explains Heizmann.

The brands Volkswagen, Audi and Škoda, which already produce locally, will all start producing electric vehicles locally as well. In addition, Volkswagen Group China has founded a third joint venture with the Chinese carmaker JAC to make purely electric vehicles. A SUV with purely electric drive will be introduced as early as this year. It will not compete with current and future vehicles made by the two large, long-term joint venture companies. The primary target of the additional offer by the third joint venture is the volume segments of the highly competitive Chinese e-mobility market.

And starting in 2020/21, Volkswagen Group China will be stepping up yet another gear. At that point, cars will also be manufactured in China on the basis of the modular electrification matrix optimized for purely battery-driven vehicles, which will then have a range of up to 600 km.

The Group is preparing to be able to deliver 1.5 million New Energy Vehicles (NEV) to customers in the year 2025. A dimension which underlines the Volkswagen Group’s determination to take a leading role in the electrification of the Chinese automotive market as well.  

How the electric quota works

The improvement of air quality is naturally a decisive factor here. Analogous to the CO2 targets in Europe, the Chinese government has also set guidelines for fleet consumption. In the year 2020, average fuel consumption will be set at 5 l/100 km, and in 2025 it should be approximately 4 l/100 km on average. Despite fuel-efficient gasoline engines, this target cannot be achieved without electric vehicles. In addition, there will be a so-called electric quota starting in 2019.

As of that year, all car manufacturers must collect “credit points” for ten percent of the vehicles they produce in China, and in 2020 for twelve percent. Four to five credit points will be given for each electric vehicle produced (depending on range), while a plug-in hybrid with a range of 50 kilometers will receive two credit points. This means that, for each million vehicles produced in 2019, 50,000 plug-in hybrids or around 25,000 battery-run vehicles or an equivalent mixture of vehicles of both drive types must be produced. A negative or positive credit may, however, be transferred to the following year, in this case from 2019 to 2020

Board of Management member for China Jochem Heizmann is certain: “We will definitely achieve the quota.” In his opinion, the Chinese government’s desire to get to grips with massive environmental pollution and at the same time to achieve strong economic growth corresponds perfectly with Roadmap E.