Volkswagen Group China to Switch Completely to Renewable and Clean Electricity for Production by 2030: Memoranda of Understanding Signed with Two Energy Partners

Volkswagen Group China, together with its joint ventures SAIC Volkswagen, FAW-Volkswagen, Volkswagen Anhui, and the Group’s component plants, have signed Memoranda of Understanding for renewable electricity cooperation with China Datang Corporation and CGN New Energy, respectively. The partnerships aim to enhance the deployment of renewable electricity throughout the Group’s production processes in China. By 2030, all Group production facilities in China are set to use 100% renewable or clean electricity, advancing both its carbon neutrality ambitions and contributing to China’s ‘dual carbon’ goals.

Olaf Korzinovski, Executive Vice President of Volkswagen Group China, responsible for Components, Logistics and QA, as well as the Chief Environmental Officer, said at the signing ceremony: “Volkswagen Group aims to become a global leader in sustainable mobility and a model for environmental protection. This cooperation represents an important milestone for Volkswagen Group China on its journey towards carbon neutrality. Together with China Datang Corporation and CGN New Energy, we will ensure the stability, economical efficiency, and long-term sustainability of Volkswagen Group’s renewable electricity supply in China. In the future, we also hope to strengthen cooperation with various parties in areas such as supply chain carbon reduction, green charging, and virtual power plants. Alongside our other decarbonization efforts, and under our ‘In China, for China’ approach, these will support Group’s carbon neutral vision as well as China’s ‘dual carbon’ goals.”

Sustainable development is an integral part of Volkswagen Group’s transformation strategy. In recent years, Volkswagen Group China’s environmental management team, together with the Group’s joint ventures and component plants in China, has made substantial progress towards carbon neutrality in production focusing on energy supply partnerships, renewable electricity generation and energy efficiency measures.

Energy supply partnerships: Volkswagen Group China is actively expanding its utilization of renewable or clean electricity throughout its 39 vehicle and component production sites in Northeast, North, Southwest, and Southeast China. Together with its joint ventures and component plants, the Group is actively expanding its cooperation with local energy companies to ensure a stable, economically efficient, and long-term sustainable supply of renewable electricity. Under its plans, two-thirds of the electricity consumed by Group plants will come from renewable and clean energy sources by 2024.

Renewable electricity generation: As of 2023, Volkswagen Group’s installed capacity for renewable energy generation in China has reached 244MW, equivalent to the annual electricity needs of nearly 100,000 Chinese households. By the end of 2025, this capacity will exceed 300MW, covering about 10% of the electricity requirements of its production facilities in China.

Energy efficiency measures: Volkswagen Group China is improving energy efficiency through advanced management systems and cutting-edge technology. The Group has tasked its factories to enhance their energy management efforts with a focus on waste heat utilization, baseload optimization, digital energy management systems and other areas. Special attention is being directed towards those facilities with greatest energy needs to explore energy-saving potential and boost energy efficiency. In 2023, the Group’s factories in China implemented 104 energy-efficiency measures which saved 148,727 MWh, equivalent to the annual electricity consumption of more than 50,000 households. By 2030, the Group is committed to reducing energy consumption in China by 16% (compared to the 2018 level) through such measures.

Volkswagen Group is firmly committed to the Paris Climate Agreement and aims to become net carbon neutral by 2050. With the “goTOzero” environmental mission statement, Volkswagen Group China will continue to implement a series of initiatives to create “Zero Impact Factories” in support of the target.