Volkswagen is following the lead of many other global automakers: it has signed a deal for a new electric-vehicle joint venture in China.

The German automaker said this week it has partnered with Chinese automaker Anhui Jianghuai Automobile Co. (JAC) to produce electric vehicles, as well as to market various mobility services.

Both Volkswagen and JAC hold a 50 percent stake in the joint venture.

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The joint venture is set to conclude after 25 years, but over the next two decades, each company has relatively grand plans.

Volkswagen and JAC's goal is to deliver 400,000 electric vehicles to the Chinese market by 2020, the year in which VW's chairman said the company's first high-volume electric car must arrive in the country.

The figure jumps to 1.5 million vehicles by the year 2025.

Volkswagen I.D. electric car concept, 2016 Paris auto show

Volkswagen I.D. electric car concept, 2016 Paris auto show

The first vehicle to come from the freshly-inked joint venture is expected to arrive in 2018, according to Volkswagen.

Per the agreement, a new factory will also be constructed for the joint venture's operations and will include a research and development center as well.

Volkswagen and JAC will research so-called new energy vehicles (hybrids, battery-electric vehicles, and plug-in hybrids), vehicle connectivity, and various automotive data services.

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Mercedes-Benz recently agreed to a broadly similar deal with China's BAIC.

The brand's parent company, Daimler, will build all-electric vehicles at its China factory with support from BAIC.

China is not only the largest market for electric vehicles, it's also the world's largest market for luxury passenger cars and SUVs.

Volkswagen I.D. Buzz concept, 2017 Detroit auto show

Volkswagen I.D. Buzz concept, 2017 Detroit auto show

Volkswagen has had a presence in China since 1984, one of the very first Western automakers to get a foothold in the previously closed market.

Over three decades, Volkswagen has sold more than 30 million vehicles through its various brands and other partnerships. Its Audi luxury brand became particularly popular with high-level government officials.

VW Group also has joint ventures with China's SAIC and FAW to build and sell cars.

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The company has turned its full attention to battery-electric vehicles in the aftermath of its global diesel scandal.

The automaker used illegal "defeat devices" to cheat emission tests and sold over-polluting vehicles to consumers for years.

While most of the fines and settlements wrap up in the United States, that scandal could just be unfolding in Europe. Only recently, Audi was accused of cheating emission tests with its A8 sedan, for instance.

Volkswagen I.D. electric car concept, 2016 Paris auto show

Volkswagen I.D. electric car concept, 2016 Paris auto show

In an effort to move past that in the public eye, a major part of the company's advanced development efforts are now focused on electric cars.

It has said it will offer 30 different battery-electric vehicles by 2025 across its full portfolio of brands.

Much of that is likely driven by regulations issued by the Chinese government, however, which has far more stringent carbon-reduction and electric-car sales goals than any other large global market.


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