Volkswagen acquires 20% of Chinese battery maker Guoxuan

in automobile •  4 months ago 

Volkswagen acquires 20% of Chinese battery maker Guoxuan (Charged)

  • According to a news article released by Reuters, VW plans to acquire 20% of the Chinese battery manufacturer Guoxuan, which at current prices would be worth c. US$560m.
  • VW aims to sell 1.5m new energy vehicles per year in China by 2025.
  • Guoxuan is reportedly a “mid-tier” battery maker, i.e. smaller than industry leaders CATL and BYD, and is based close to where VW is building EVs in a JV with JAC Motor.

Analysis and Comments

  • VW already has a strategic partnership with China’s largest battery company (CATL), so this adds to their plans to protect their supply systems for key components (apparently) for their Chinese manufactured EVs.
  • It has been estimated that if VW hits their long term plan to manufacture 26m EVs by 2029 then they will need to secure more batteries than are currently produced worldwide.
  • The move comes just a few days after the VW chief executive said that “the time of classic car manufacturers is over” – the potential move to take a stake in Guoxuan should be seen in this context.
  • As a reminder, the new European rules on vehicle emissions came into effect at the start of this year – under these car manufacturers need to have an average fleet emission level of 95g/km.
  • It is reported that the current average for all European manufacturers is closer to 120g/km – so they have a way to go.

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