BEIJING Germany's Volkswagen AG (VOWG_p.DE) and Anhui Jianghuai Automobile Group (JAC Motor) have received approval from Chinese regulators to form a joint venture to make electric vehicles, the two automakers said on Monday.
The National Development and Reform Commission (NDRC), China's top state planner, gave a green light to JAC and VW to build 100,000 pure battery electric vehicles annually in a project worth 5.1 billion yuan ($740 million), according to a JAC Motor stock exchange filing.
A VW spokesman confirmed the approval but said certain administrative procedures still needed to be completed for a joint venture contract to be signed with JAC Motor.
Volkswagen, China's largest foreign automaker, has pledged to rapidly develop a range of electric vehicles as the Chinese government aggressively promotes the segment as a way to cut intense smog in much of the country.
VW already has joint ventures with China FAW Group Corp [SASACJ.UL] and SAIC Motor Corp Ltd in the country.
The has company previously said it aims to sell 400,000 "new energy vehicles," a category which includes pure electric and plug-in petrol-electric hybrids, in China by 2020 to meet strict Chinese fuel economy and emissions regulations, with electric vehicles made with JAC Motor coming in addition to that figure.
(Reporting by Jake Spring and Min Zhang; Editing by Muralikumar Anantharaman and David Evans)