Volkswagen AG and China’s Anhui Jianghuai Automobile (JAC Motor) have received approval from Chinese regulators to form a joint venture to make electric vehicles, according to a stock exchange filing.
The National Development and Reform Commission (NDRC), China’s top state planner, gave a green light to JAC Motor and VW to build 100,000 all-electric vehicles annually in a project worth 5.1 billion yuan ($740 million).
A VW spokesman confirmed the approval but said certain administrative procedures still needed to be completed for a joint venture contract to be signed with JAC Motor.
The two companies had signed a memorandum of understanding to jointly develop electric vehicles in China last September.
Volkswagen is China’s largest foreign automaker in China and already has joint ventures with China FAW Group Corp and SAIC Motor Corp Ltd.
The has company previously said it aims to sell 400,000 “new energy vehicles,” a category which includes pure electric and plug-in petrol-electric hybrids, in China by 2020 to meet strict Chinese fuel economy and emissions regulations, with electric vehicles made with JAC Motor coming in addition to that figure.