Volkswagen converts one of its Shanghai factories into EV production line

June 7, 2023 3:41 am

Volkswagen's Chinese joint venture (JV) with SAIC Motor has transformed one of its plants in Shanghai for the production, research, and development of electric vehicles (EV), the German automaker said on Tuesday.

The statement came after social media circulated that Volkswagen would close a factory in Shanghai.

Volkswagen explained that the production of internal combustion engine models at the SAIC Volkswagen main plant in Anting will be relocated to other facilities, ensuring no impact on the production capacity of individual models.

Established in October 1984, the JV operates on a 50/50 partnership between Volkswagen and SAIC Motor, manufacturing vehicles under the Volkswagen, Skoda, and Audi brands.

JVs are a key part of Volkswagen's strategy in China. In addition to the partnership with SAIC, Volkswagen has formed JVs with FAW in Jilin and JAC Motors in Anhui.

In the meantime, Volkswagen has established various other partnerships in China to explore different areas of innovation. For instance, it has joined forces with BYD to focus on the development of EVs and has partnered with Geely to advance autonomous driving technology and other related initiatives.

The giant is clearly increasing its bets on China's competitive EV industry. In a recent announcement, Volkswagen disclosed that its software unit, Cariad, is forming a JV with Chinese technology group ThunderSoft. This collaboration aims to develop China-specific features for Volkswagen's 'infotainment' systems and car cockpits.

Volkswagen is investing about 1 billion euros ($1.07 billion) in a new EV development and procurement center in Hefei to better adapt its cars to Chinese customers' tastes. The division, which employs more than 2,000 people, will be launched in 2024 and will be led by Marcus Hafkemeyer, chief technology officer for Volkswagen China.