Shanghai (ZXZC)- On Sept. 23, Volkswagen Group (VW Group) celebrated the first spade cut for a battery system manufacturing factory in Hefei, the capital of Anhui Province, according to a press release from the German auto giant.

Photo credit: Volkswagen Group

Wholly owned by VW Group, the Hefei-based factory will feature an initial capacity of 150,000 to 180,000 high-voltage battery systems per year for local-produced all-electric vehicles. Covering an area of over 45,000 square meters, the factory is neighbor to the MEB plant VW Group is building under a majority-owned venture with JAC Group.

VW Group China plans to pour more than 140 million euros ($164 million) in the construction of the new battery system factory and supporting facilities by 2025. Besides, the factory is scheduled to commence production in the second half of 2023.

“With the rapid expansion of the future all-electric vehicle market, we should take moves in such key components as battery system so as to reinforce VW's strength in electric vehicle value chain and maximize the group’s synergy and innovation abilities. The strategic battery deployment plays a vital role in the group's e-mobility offensive and will help VW Group China increase the sales of NEVs to 40% of overall auto sales by 2023,” said Stephan Wollenstein, CEO of Volkswagen Group China.

VW Group currently has four ID. series BEV models for sale in China. The automaker announced on Wednesday it delivered 7,023 ID. vehicles in August, representing a 20.9% month-on-month jump. The ID.3 hatchback is expected to hit the market at the end of this year and was available for orders from late August.