The China National Development and Reform Commission (NDRC) has given final approval for local carmaker JAC and Germany’s Volkswagen Group to jointly produce a new brand of passenger electric vehicles in the country.
The two companies first signed a memorandum of understanding for an electric vehicle partnership back in September.
A statement from JAC this week indicated total project investment would be 5.061 billion renminbi ($735m), including construction investment of 2.95 billion renminbi.
Each partner will invest 1 billion renminbi in cash with the rest of the funds raised independently, according to the statement.
The joint venture has a term of 25 years.
The project will use existing land owned by JAC in the Economic-Technological Development Zone in Hefei, Anhui and will have an annual capacity of 100,000 electric vehicles.
VW is understood to have indicated that vehicle production there will begin during 2018.