Volkswagen and Anhui Jianghuai Automobile (JAC Motor) have gotten approval from Chinese regulators to form a joint venture to develop electric vehicles, the two companies stated on Monday.
The National Development and Reform Commission (NDRC), China’s leading state organizer, provided a green light to JAC and Volkswagen to develop 100,000 pure battery electric vehicles yearly in a project worth 5.1 billion yuan ($740 million), according to a JAC Motor stock market filing.
A VW represented confirmed the approval however added certain administrative treatments still needed to be completed for a joint venture agreement to be signed with JAC Motor.
Volkswagen is China’s largest foreign automaker and has pledged to rapidly develop a range of electric vehicles as the Chinese government strongly promotes the sector as a way to cut extreme smog in much of the nation.
VW already has joint ventures with China FAW Group and SAIC Motor in the country.
The has company stated before that it intends to sell 400,000 “new energy vehicles,” a category that includes pure electrical and plug-in petrol-electric hybrids, in China by 2020 to get along with strict Chinese fuel economy and emissions policies, with electric cars made with JAC Motor coming in addition to that figure.