Chinese officials green light Audi-FAW Group's $3.3 billion production facility in the provincial capital of Changchun.
(Photo : CHRISTOF STACHE/AFP via Getty Images)
Audi received some great news in China this week as the German automaker and state-owned partner FAW Group finally got the much-needed approval from Chinese government officials for their new production facility in the provincial capital of Changchun, as per the Truth About Cars. The two carmakers will soon start constructing their electric vehicle joint venture plant in Jilin province.
This is a major development for Volkswagen Group as the Chinese market has been its main priority in recent years. Volkswagen is currently the top-selling brand in the Chinese region, with Audi being the highest volume premium automaker from the European continent.
Audi is looking to further bolster its brand presence in the Chinese market with this partnership with FAW Group marking its first joint venture with a majority shareholder in China in building EVs. Audi is optimistic that having this joint venture with the FAW Group will help strengthen the German marque's position in the Chinese market as a manufacturer of fully electric vehicles.
Audi and FAW Group investing huge money for their EV facility
According to Hindustan Times, Audi and FAW Group will be investing a total of $3.29 billion (20.93 billion yuan) for their joint venture facility. Local planning regulators have already approved the project's groundbreaking for April of this year, with the facility tentatively scheduled to be completed sometime in 2024.
A spokesperson for Volkswagen confirmed the approval, saying, "The Audi FAW NEV project is an important cornerstone of Audi's electrification strategy in China. We are consequently pushing forward the relevant works in this project. The construction of the plant is planned to start in the second quarter of 2022."
The German firm said it would ideally like to see production start before the year was over, but construction of the facility is already behind schedule after experiencing alleged bureaucratic hang-ups with state regulators.
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New EV plant to manufacture 150,000 electric cars a year
According to the regulator of the project, the new facility in Changchun is scheduled to start vehicle production in December 2024, and it will have the capacity to manufacture 150,000 electric cars every year. The statement also showed the approval for the project was given on February 11 and that the joint venture plant plans to produce three fully-electric models, including Audi's much-awaited e-tron SUV.
This is not the first joint venture for Audi and FAW Group as the two automakers already manufacture combustion vehicles together in Changchun. The two groups signed a memorandum of understanding during the German-Chinese Automotive Conference in October of 2020 to jointly produce premium electric vehicles in China, as per Auto Evolution.
However, the project suffered a setback with Audi announcing in November 2021 that plans had fallen behind schedule, with relevant authorities delaying their approval. That debacle is all over now, with Chinese authorities finally giving the project the green light.
Apart from FAW Group, Audi also is planning to make vehicles with Shanghai-based automaker SAIC Motor. The joint venture is setting a goal for its electrified vehicles to represent a third of Chinese car sales by 2025.
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