Audi, FAW unite to launch Electric Vehicles in China

German luxury car manufacturer Audi AG has signed a Memorandum of Understanding (MoU) with Chinese state-owned FAW Group to initiate a luxury electric vehicle (EV) production venture.

The MoU was signed during the German-Chinese Automotive Conference in Changchun, northern China.

Audi has a long-standing relationship with China-based FAW, the largest car market in the world which has become stronger through the current agreement. The German company also plans to make vehicles with Shanghai-based automaker SAIC Motor.

Markus Duesmann, Chairman of the Board of Management of AUDI AG and responsible for China-business said, “This decision emphasizes the strategic importance of the Chinese market. We are thus actively pushing forward with innovations locally”.

Audi said it will build models based on the Premium Platform Electric (PPE) developed with Porsche.

Audi is systematically following the path of sustainable mobility in China and specializes in locally produced drive portfolios for the needs of Chinese premium customers. The new venture will start manufacturing several models in China from 2024.

Werner Eichhorn, President of Audi China said, “This is a further milestone in our electrification strategy for the Chinese market. We are also confirming our commitment both to our longstanding Chinese partner FAW and to our activities in China, which we are now taking to a new level.”

Audi plans to contribute towards a third of China’s sales of electric vehicles by 2025. In the first nine months of 2020, it sold 512,081 vehicles in China, and last year, around 690,000 vehicles.

Audi and Porsche representatives in China said there were no plans to add Porsche in the new venture.

EV manufacturers such as home-grown NIO Incorporated and Xpeng Incorporation, as well as international companies such as US leader Tesla Incorporation, are expanding their production capacity in China, where greener vehicles are encouraged by the government to minimize air pollution.