Volkswagen has agreed to invest €2.1 billion in two separate Chinese electric vehicle players, upping its bet on the world's biggest auto market as international rivals seek to muscle in.
VW said it will invest €1 billion to take a 50% stake in the state-owned parent of Anhui Jianghuai Automobile Group (JAC Motors), also raising its stake in an existing electric vehicle joint venture with JAC to 75% from 50%.
The joint venture will launch five more electric models by 2025 and establish a car manufacturing base, said VW.
The German giant aims to sell 1.5 million new energy vehicles (NEV) - including battery electric cars as well as plug-in hybrid and hydrogen fuel-cell vehicles - a year in China by 2025.
In a separate transaction, VW said it will pay €1.1 billion to acquire 26.5% of Guoxuan High-tech, a maker of electric vehicle batteries, becoming its biggest shareholder.
VW said Guoxuan, based in Hefei like JAC, will supply batteries to its EV models in China.
The deals come as global rivals like US electric vehicle maker Tesla seek to make inroads in the Chinese car market. Tesla last year became the first foreign automaker to wholly own a car plant in China.
China has set a target of 25% of 2025 annual vehicle sales to be made up of NEVs. More than 25 million vehicles were sold in China last year.
Today's moves also make VW the latest foreign automaker to increase ownership of operations in China since the government started to relax rules in 2018, with German peer BMW quick to take control of its main local venture.
VW also has ventures with state-owned China FAW Group and SAIC Motor Corp.