VW to take 50% stake in JAC and becomes major shareholder of Gotion High-Tech

On May 29, 2020, IIA learned from Volkswagen that Volkswagen plans to invest 1 billion euros to acquire a 50% stake in Anhui Jianghuai Automobile Group Holdings Co., Ltd. At the same time, it will increase its shareholding in the electric vehicle joint venture JAC Volkswagen to 75% and obtain joint venture management right. At the same time, it will obtain a 26% stake in the EV battery maker Gotion High-Tech to support the future electrification of the group. The total investment of the above two projects is estimated to be about 2 billion euros.

Dr. Diess, CEO of Volkswagen Group, said: "The Volkswagen Group has joined hands with strong and trusted partners to further promote the Group's electrification strategy in China. The rapid development of electric vehicles has brought more opportunities for JAC Volkswagen's development. At the same time, we will actively carry out strategic cooperation with Gotion High-Tech in the field of electric vehicle battery cells. "

According to the official information released by Volkswagen, Volkswagen (China) Investment Co., Ltd. and relevant government agencies in Anhui Province formally signed a "Letter of Intent" to obtain 50% of Anhui Jianghuai Automobile Group Co., Ltd. parent company-Anhui Jianghuai Automobile Group Holdings Co., Ltd. At the same time, increase the shares of JAC Volkswagen to 75%. The contracting parties plan to complete the relevant transaction by the end of this year after obtaining approval from relevant departments.

In this regard, Dr. Stephan Woellenstein, CEO of Volkswagen Group (China), said: "It is an honor for Volkswagen Group to participate in the development process of Anhui Jianghuai Automobile Group Holdings Co., Ltd., to realize direct investment in Chinese companies in the electric vehicle industry chain, Witness another milestone of mutual trust and friendly cooperation between China and Germany. This investment will further deepen the strategy of Volkswagen Group to achieve localization and sustainable mobility in China. Further opening of the Chinese market will also give Volkswagen Group more opportunity."

In addition to acquiring a 50% stake in Anhui Jianghuai Automobile Group Holdings Co., Ltd., Volkswagen (China) Investment Co., Ltd. will invest 1.1 billion euros, acquire a 26% stake in Gotion High-Tech, and become a major shareholder. If successfully approved by the regulatory authorities, the investment transaction is expected to be completed by the end of 2020.

According to the officially announced plan, the cooperation with Gotion High-Tech has provided Volkswagen with the opportunity to gain more in-depth market insights in the future battery strategy, ensuring battery supply and hedging raw material price fluctuations. Gotion High-Tech will become a certified supplier of Volkswagen and will supply batteries to the Group's pure electric vehicles and MEB platform products in the Chinese market in the future.

SOL is a brand of JAC Volkswagen. The first model E20X was launched in September 2019. With the new investment of the Volkswagen Group in JAC Volkswagen, the Group will further strengthen its electrification strategy in the future. In addition, the company plans to launch five more pure electric vehicles by 2025, and at the same time establish and improve electric vehicle factories and research and development centers.