Volkswagen will invest $1 billion into a new China electric vehicle centre

Volkswagen says it will invest around one billion euros ($1.1 billion) in a new China centre for the development, innovation and procurement of fully connected electric cars in the southern Chinese city of Hefei.

The new unit, with the project name ‘100%TechCo’, combines vehicles and components R&D teams with procurement and will help Volkswagen shorten the development times of new products and technologies by around 30%.

It also aims to integrate state-of-the-art technologies from local suppliers into the development process at an early stage, to align the Group’s vehicles even more quickly with the wishes of customers and achieve a shorter time to market.

It is expected to launch in early 2024 and will comprise more than 2,000 employees from procurement and R&D. The CEO will be Marcus Hafkemeyer, Chief Technology Officer of Volkswagen Group China.

Last year, German automaker BMW also announced that it will invest 10 billion yuan ($1.40 billion) to expand the production of its electric vehicle batteries in China.

It is interesting to see that amidst the ongoing Washington-Beijing supply chain tension, auto market leaders like Volkswagen, Tesla and BMW are undeterred from making sizeable investments in the China auto market.