Volkswagen Group begins China electric car domination

Following its belated but convincing arrival to the electrified-vehicle market, Volkswagen Group says it will begin to use its diverse brand portfolio to dominate low and zero-emissions vehicle sales in China.

More than 18 billion euros has been earmarked for developing battery-electric and plug-in hybrid vehicles from the Volkswagen, Audi, Porsche, and Bentley brands, offering a rising number of environmentally conscientious Chinese buyers unprecedented choice.

Volkswagen Group will look to capitalize on growing frustration at the terrible air quality in Chinese cities and the government’s desire to address it. Beijing is one of the worst polluted cities in the world with daily PM2.5 concentrations averaging 89.5 micrograms during 2013 – more than three times London’s pollution on a bad day.

China hasn’t adopted financial incentives for ‘new-energy’ vehicles in the same way that European countries and the US have, but recent comments by Vice Premier Ma Kai suggest that the 10 percent purchase tax may be waived in the future, in addition to current subsidies. Luxury western automakers stand to gain from this.

Volkswagen Group’s product offensive will be formidable, with 17 models meeting the Chinese government’s ‘energy-efficient vehicle’ regulations arriving in the coming years. While a plug-in hybrid version of the Porsche Panamera is already available in China, Volkswagen’s e-up! and the new e-Golf will be the first pure electric cars available to buyers. Plug-in hybrid offerings from Audi, in the form of the A3 Sportback e-tron and A6 e-tron, will follow, as will recently previewed hybrid models from Bentley.

“All these vehicles are highly efficient and eco-friendly. And at the same time they offer lots of driving pleasure. That is exactly what people all over the world and here in China expect of the Volkswagen Group,” said CEO Martin Winterkorn.

“Thanks to the modular strategy, which is also being implemented at our Chinese factories, we can electrify nearly every model in our range: From small cars to large sedans, from pure electric drives to plug-in hybrids.”

Volkswagen Group’s claim may seem ambitious, but the seemingly unstoppable automaker already has a strong foothold in China, following deliveries of 2.4 million vehicles last year. Concerning electromobility, Volkswagen will look to get a jump on domestic brands such as Denza ,BYD, and JAC – the later selling 2,500 of its electric ‘iEV’ model last year.

Winterkorn says that expectations of what personal mobility entails are changing fast in China, with increased digitalization and an emphasis on cleaner power sources. The Group will employ half a million Chinese dealership staff and 2,700 engineers to build and sell Chinese cars of the future.