Volkswagen’s China Joint Venture to Develop Plug-in Hybrids for Local Market

The joint venture (JV) between state-owned SAIC Motor Corp. Ltd. and Volkswagen AG will start developing its own plug-in hybrid models, a source familiar with the matter told Caixin, in a move insiders say shows that Chinese automaking is now leading innovation instead of simply emulating foreign manufacturers.

The effort by SAIC Volkswagen Automotive Co. Ltd. is its latest to appeal more to Chinese consumers with an interest in new-energy vehicles (NEVs), which have increasingly become a key growth driver for the world’s largest auto market. Beijing aims to make almost all new cars sold in 2035 in the country eco-friendly amid its push to reduce carbon emissions.