Volkswagen AG announced today that it has signed  a Memorandum of Understanding (MoU) with Anhui Jianghuai Automobile Co., Ltd. (JAC) in Wolfsburg to define the next phase of negotiations between the two companies for the joint development of all-electric vehicles  in China.

Under government rules, foreign car makers must partner with local Chinese firms to produce cars.

Based on the MoU, the parties intend to enter into discussions to evaluate the perspectives and feasibility of a new joint venture company focusing on new energy vehicles (NEV), to carry out full scope cooperation in areas including research and development, manufacture, sales and mobility services in the field of NEV and parts in order to improve fuel efficiency. The top priority will be to develop zero-emission mobility solutions.

“Together, Volkswagen Group and JAC will thoroughly explore all options how to concentrate our resources, including existing and future model platforms, technologies and other expertise, to achieve a competitive product strategy as soon as possible,” said Prof. Dr. Jochem Heizmann, Member of the Board of Management of Volkswagen Aktiengesellschaft as well as President and CEO of Volkswagen Group China.

“We look forward to a full scope cooperation together with Volkswagen Group, focus on new energy vehicles, to provide Chinese consumers with highly cost-effective battery-powered electric vehicle (BEV) products that promote the development of the Chinese new energy vehicle sector as well as the Chinese auto industry’s transformation and upgrading,” said An Jin, Chairman of the Anhui Jianghuai Automobile Co., Ltd.

Anhui Jianghuai Automobile Co., Ltd. is an automobile company encompassing R&D, production, sales and service and other businesses related to the production and sale of commercial and passenger vehicles, including powertrains. It has two vehicle brands, “Jianghuai” and “Ankai”.

Jianghuai is not popular abroad but ranks No. 9 among auto brands in China in total number of cars and SUVs sold. The company already sells an all-electric sedan, the iEV.