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Volkswagen building new EV battery system factory in China By Reuters

by Mike Robinson

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© Reuters. FILEPHOTO: An electric car (EV) charging point for Volkswagen is visible during the Auto Shanghai media day in Shanghai, China on April 20, 2021. REUTERS/Aly Song

BEIJING (Reuters) -Volkswagen AG said on Thursday it is building a new electric vehicle (EV) battery system factory in eastern China’s Hefei city which will start production in 2023.

German automobile manufacturer Volkswagen is setting up a plant for electric vehicles in Hefei as part of a majority-owned joint venture with JAC. The company also owns a share in Gotion, an EV battery manufacturer, which is also located in Hefei.

The company stated that it will invest over 140 million euros ($164 millions) into the new battery plant by 2025. Local EV production will start at 150,000-180,000 units per year.

Volkswagen (DE: ) released five ID. China is the biggest market for electric cars in the world, and Volkswagen (DE:) has introduced five new ID. Last month, it sold approximately 7,000 of these vehicles in China and plans to sell 80,000-100,000.

Reuters, citing persons familiar with this matter, reported that Volkswagen has been in negotiations to loosen its hold on Hefei. It is causing tensions with other Chinese partners and could risk being marginalized.

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