Volkswagen AG is poised to buy 50% of Anhui Jianghuai Automobile Group Holding, the parent of EV partner JAC Motors, for at least 3.5 billion yuan ($491 million), Reuters reported Wednesday citing people familiar with the matter.

The parties were in final talks to seal the deal which would mark Volkswagen's largest investment deals with Chinese electric vehicle firms.

It is also set to become the biggest shareholder of EV battery maker Guoxuan High-tech Co Ltd, the people said, adding both deals could be announced as early as Friday.

The deals highlight how Volkswagen is keen to retain its status as the largest foreign automaker in China even as government virus-busting measures decimate sales, in the face of encroaching rivals such as Tesla which last year became the first foreign automaker to wholly own a car plant.

Volkswagen target Anhui Jianghuai, based in the eastern city of Hefei, is fully state owned. It counts its core asset as its 25.23% stake in JAC - formally Anhui Jianghuai Automobile Group Corp Ltd, which has a market value of $1.84 billion.