VW Looks To Tap Into Lucrative Chinese Market With New Shanghai Factory

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Volkswagen has started building its first full-scale electric vehicle factory just a few miles outside of Shanghai, with the first vehicle it will build being a VW-branded SUV.

The new factory will be dedicated to building fully electric vehicles for the entire Volkswagen group based on the company’s modular electric battery Modular Electrification Toolkit, or MEB for short. Volkswagen has been reacting to the electrification of personal vehicles with fits and starts of reactive and proactive actions. On one hand, Volkswagen Group CEO Herbert Diess is pushing top company leaders to drive electric vehicles, and on the other hand, he has raised up a stink from strict new EU emissions regulations on the verge of a final vote, whining about job losses.

Volkswagen shared that the new factory will be chock full of robots, with plans for over 1,400 of the non-stop precision workers at the factory. The high levels of automation will work to churn out the expected 300,000 vehicles the factory will produce when it is fully built up, with the first vehicles coming off the line in 2020. The move is the latest in a wave of automotive manufacturers moving into the country to capitalize on the lucrative Chinese automotive market, which is heavily biased towards electric vehicles.

If the news sounds eerily familiar, that’s because rival Tesla selected Shanghai for the location of its third Gigafactory, following its first battery Gigafactory in Nevada and the solar Gigafactory outside of Buffalo, New York. The Volkswagen Group’s new factory will be located some 19 miles to the west of Shanghai in Anting. Tesla went the other direction and moved into the Lingang New City, which is located to the southeast of downtown Shanghai.

Make no mistake, the industry has been altered forever. Tesla is forcing change via both direct action from the sales of its vehicles and indirect action by showing off its prototype Semi Truck years before it’s ready as a warning shot across the bow of the heavy truck industry. “We’re coming for you and we’re bringing our batteries with us.”

In any case, though, China is demanding electrification if you want significant sales in the largest automotive market on the planet, and the EU is following in its steps as well.

Volkswagen’s move into China is one of the more proactive moves, but time will tell how concrete it really is when we hear more about the scale of the factory and the electric vehicle production volumes it will actually churn out. VW has many amazing concept electric vehicles under its belt, but very little to show on the production side of the equation, which has led many to not take it at its word when it comes to future plans. “Show me the cars on the lots that consumers can buy today and we can go from there.”

That said, as noted an hour ago, an Audi executive told CleanTechnica last week that Audi is prepared to produce far more Audi e-tron electric SUVs than people have been presuming and reporting. A separate Volkswagen executive talked at length with CleanTechnica and emphasized that, unlike some electric vehicles from competitors, Volkswagen Group’s EVs have been designed fully electric and do not share a platform with gasoline or diesel cars. Given that the company is in the business of making money and has factories and production lines tooled up or tooling up for these vehicles, the point was that the company would like to produce and sell as many of these vehicles as it can — each extra sale helps to cover the R&D and factory investment costs.

Source: Engadget

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Kyle Field

I'm a tech geek passionately in search of actionable ways to reduce the negative impact my life has on the planet, save money and reduce stress. Live intentionally, make conscious decisions, love more, act responsibly, play. The more you know, the less you need. As an activist investor, Kyle owns long term holdings in Tesla, Lightning eMotors, Arcimoto, and SolarEdge.

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