Volkswagen AG VWAGY reportedly revealed its intention to allocate €2.5 billion ($2.68 billion) towards expanding its production and innovation center in Hefei, Anhui Province, China.
The investment aims to bolster the company’s presence in the region and will focus on production and innovation.
Preparations are underway for Volkswagen and Chinese partner XPeng Inc XPEV to commence production of two brand models in 2026, reported Reuters.
The collaboration underscores Volkswagen’s dedication to expanding its electric vehicle lineup in China, a crucial market for the automotive industry.
Ralf Brandstaetter, Volkswagen Group’s management board member for China, emphasized that the enhancements in the Hefei site would facilitate the faster deployment of technologies.
Volkswagen’s investment comes amidst fierce competition in China’s electric vehicle market. Losing its position as the best-selling car brand to local EV manufacturer BYD Co., Ltd. BYDDF in late 2022, Volkswagen aims to revitalize its portfolio with new electric models to regain its competitive edge, the report noted.
Read Next: Volkswagen Q1 Deliveries Increase 3% Amid EV Challenges: Details
Price Action: VWAGY shares are trading lower by 1.21% at $15.53 on the last check Thursday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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