Buy when there's blood in the streets..."

This is likely the adage Volkswagen had in mind during the collapse of China's car market over the last quarter, as a result of both an auto market mired in pre-virus recession, and the effects of the pandemic and its ensuing lockdowns. 

Volkswagen, eager to gain ground on Tesla in the EV space globally, went on an acquisition/investment spree, according to Reuters. The company is now sealing "its largest investments deals with Chinese EV firms". 

Volkswagen will buy 50% of Anhui Jianghuai Automobile Group Holding, the parent of EV partner JAC Motors for $491 million and will become the largest shareholder of EV battery maker Guoxuan High-tech Co Ltd. 

Anhui Jianghuai is fully state owned and has a 25.23% stake in JAC, which has a market value of $1.84 billion. Volkswagen plans to deploy fresh capital with the JV in hopes of building capacity to manufacture with its MEB platform - the company's architecture for producing EVs efficiently. JAC shares were limit up on the news on Wednesday. 

VW will own 27% of Guoxuan via a private placement. The company is valued at $4.3 billion, making the stake worth about $1.16 billion.

The deals make it clear that VW is trying to vertically integrate themselves in order to maintain their title of largest foreign automaker in China, despite Tesla's efforts. Last year, Tesla became the first foreign automaker to wholly own a car plant in China. 

The Chinese government had previously targeted 25% of all car sales to be EV sales by 2025. As we have reported, that goal has been brushed aside momentarily as the Chinese government deals with the consequences of its entire economy shutting down as a result of the coronavirus. The Chinese Passenger Vehicle Association has now estimated that it will not be able to meet its 25% goal in the original timeframe. 

VW's investments make it the latest automaker to increase its ownership in China. 

The company said in a statement: “Volkswagen consistently searches for ways to strengthen and deepen our relationships with local partners. In this regard we will explore possible options together with all stakeholders to secure long-term success.”

Recall, just about a week ago, we highlighted the Volkswagen ID 3, the company's $33,000 entry into the EV market that is expected to compete directly with Tesla.