German companies increasingly attracted to China's electric vehicle market

author: FutureCar Staff    

German enterprises are increasingly investing in China's new energy vehicle (NEV) industry to tap into the market potential of the country with a population of 1.4 billion. This year, China has witnessed a significant growth in the production and sales of NEVs. In the first seven months, NEV output reached 4.59 million units, a 40 percent increase compared to the previous year. Sales also rose by 41.7 percent, reaching 4.53 million units, according to data from the China Association of Automobile Manufacturers.

Hefei, the capital of Anhui Province in east China, is home to several NEV enterprises, including Volkswagen Anhui, NIO, and BYD. The city has more than 500 industrial chain enterprises and employs approximately 100,000 people. From January to May this year, Hefei produced a cumulative total of 230,000 NEVs, averaging one unit produced every minute. The city is actively developing itself as a significant NEV industrial cluster in China and globally.

Volkswagen Anhui, the first majority-owned joint venture for all-electric vehicles by Volkswagen Group in China, is a key player in the company's e-mobility push and decarbonization strategy. With a planned investment of 23.1 billion yuan, Volkswagen Anhui is rapidly building a new NEV hub in Hefei, covering the complete value chain, including R&D, manufacturing, sales, and services. The government has provided preferential policies and attractive talent recruitment policies to support the project's progress.

The company is collaborating with Hefei University and the local government to cultivate high-skilled NEV professionals. Volkswagen College, established in 2021, aims to introduce a German dual education framework into Chinese vocational institutions and higher education to nurture NEV talents for long-term industry growth. The first batch of "seed engineer" students from the cooperation program have graduated and joined Volkswagen Anhui, contributing to NEV research and development.

In addition, Volkswagen Group has reached an agreement to acquire a 4.99-percent stake in Chinese NEV startup Xpeng and co-develop two NEV models for the Chinese market. Continental AG, another German company, has also shown interest in further cooperation in Hefei. The two parties have agreed to accelerate the construction of the fourth phase of Continental's tire factory in Hefei, expand production, and plan follow-up projects in areas such as auto electronics and R&D centers.

Volkswagen and Continental are among the growing number of German enterprises interested in investing in Anhui. The China-Germany Friendship Association recently organized a visit to Anhui for well-known companies like Volkswagen, BMW, and Mercedes-Benz to discuss cooperation. The association aims to promote further cooperation between German enterprises and Anhui in the NEV industry, vocational education, youth exchanges, and other areas.

Germany, as a world-renowned automobile manufacturer, stands to benefit from and contribute to cooperation with China in terms of market access, technology innovation, and talent cultivation. China has been Germany's largest trading partner for seven years, with over 5,000 German companies active in China and over 2,500 Chinese companies active in Germany, according to Silke Besser, general manager of the German-Chinese Business Association.

FutureCar Staff