New Age Vehicles (NEVs) automakers are being wooed by China as it tries to mitigate pollution from gas guzzling traditions vehicles. Armed with incentives and friendly regulations, Beijing has applied it 2 child policy on automakers restricting their local footprint to just 2 joint ventures.
As per Jochem Heizmann, Volkswagen’s China Chief, the company has a sales target of 400,000 for new energy vehicles (NEVs) in China by 2020.
Beijing is pushing auto manufacturers to sell low-emission cars vide friendly regulations and incentives.
Ahead of the Guangzhou auto show which is scheduled to open on Friday, Heizmann told reporters that VW plans on selling 1.5 million NEVs annually by 2025.
“We have to do more in the NEV area. The government is pushing, the general environment in China is pushing that,” said Heizmann.
Sales of NEVs have quadrupled last year and their march has continued through 2016.
Later this year, VW will deliver its first locally made NEVs, as battery electric and plug-in hybrid are referred to in China, under its Audi brand.
Audi AG manufactures these NEVs through a joint venture with China FAW Group.
VW has another joint venture with SAIC Motor and both companies plan on launching their plug-in hybrid in China in the future.
Beijing has allowed global automakers to only manufacture locally if they partner with a local company through a joint venture. Furthermore, they are limited to only two JVs.
Earlier in September, VW had stated it had signed a preliminary deal to explore making electric vehicles through a JV with China’s Anhui Jianghuai Automobile. This deal has not been finalized and is subject to regulatory approvals.
“We are making good progress in our feasibility study with JAC,” said Heizmann.
With the government pushing for vehicles that have a softer impact on our environment, he was hopeful that Beijing will allow Volkswagen to enter into a third joint venture.
“Normally the legal framework is you are only allowed to have two joint ventures. There is a special chance to have this additional joint venture just on pure battery cars,” said Heizmann.