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Volkswagen Introduces 'Kai Li' Electric Vehicle to the Chinese Market

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Volkswagen's new line of green vehicles will begin production in China by late 2013 or early 2014. (Image: www.digital-delight.ch)
Volkswagen's new line of green vehicles will begin production in China by late 2013 or early 2014. (Image: www.digital-delight.ch)

BUSINESS

  • VW plans to build electric vehicles in China, called “Kai Li”
  • China paves the way for foreign companies to introduce fuel-efficient cars
  • VW entering a market with many key competitors - GM, Nissan, Daimler and BMW

Volkswagen, the largest European car maker, reported an increase in passenger vehicle shipments of over 11% within only the first quarter of the year. It also reported 20% growth in Asia Pacific, where its largest market is China.

With over 578,000 units shipped to China, VW is moving to introduce a line of electric vehicles to the Chinese market. Called “Kai Li”, the new EV will begin production in late 2013 or early 2014. VW is teaming up with FAW Group on the project, which has already been certified by the Chinese Ministry of Industry and Informational Technology. Unfortunately for the rest of the world, Kai Li will be sold exclusively in China.

Due to concerns over global warming and stricter car emission standards, the Chinese government is hoping for more joint ventures to bring indigenous EV brands. The Chinese government cares less about whether or not the technology is Chinese and more about pushing electric vehicles to the forefront.

In June, China will give generous subsidies to those who purchase fuel-efficient vehicles in five Chinese cities. The government will also exclude electric cars from license plate limitations.

Competitive Market

Despite government incentives, competition will be stiff. Daimler, another German company, admitted plans to build electric vehicles in China. BMW will invest €400 million toward its newest EV project, which will begin in 2013. Nissan has also made a deal with the government of Wuhan to promote their popular EV, called Leaf, in Chinese cities.

Because Kai Li is exclusive to China, the new EV should have little trouble gaining ground in Volkswagen's largest Asia Pacific market.

Key Players - Chinese Car Manufacturers

  • China FAW Group Corporation, Dongfeng Motor Co., Shanghai Automotive Industry Corporation (Group), ChangAn Auto Group, Beijing Auto Industry (Holding) Corporation

Key Players - EV Charging Station Leaders

  • Nari, XJ Electric, Rongxin Power Electronic, Henan Senyuan Electric, Shenzhen Auto Electric Power Plant, Sieyuan Electric, Guodian Nanjing Automation

By Nicole Manuel for
Nicole Manuel is a freelance economics, finance and blog writer with a degree in economics and over two years of experience.

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