According to Reuters, Volkswagen intends to acquire a 20% stake in China’s Guoxuan High-tech Co Ltd, which produces batteries for electric vehicles.

Note that Guoxuan’s market value is now approximately $2.8 billion. Thus, giant Volkswagen will have to pay about $560 million for 20% of this company.

In the event of a transaction, it is said that Volkswagen will, for the first time, directly own a stake in the Chinese manufacturer of electric car batteries. Following the transaction, Volkswagen will become Guoxuan’s second-largest shareholder after Zhuhai Guoxuan Trading Ltd, with a 25% stake.

Buying a portion of Guoxuan will help Volkswagen implement a large-scale program for electrifying the group’s cars. By 2030, around 40% of Volkswagen’s sales are expected to be in electric vehicles. This will allow the concern to meet the European Union’s 2030 targets for emissions of harmful gases into the atmosphere.

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