VOLKSWAGEN and Chinese domestic carmaker Jianghuai Automobile yesterday agreed to set up an equally-owned joint venture for new energy vehicles in China.

This joint venture, set to be finalized in five months, will be the third for Volkswagen in China after FAW-Volkswagen and SAIC-Volkswagen.

Volkswagen’s new energy vehicle strategy embraces purely battery cars and hybrids and the German automaker plans to deploy up to 30 electric vehicles worldwide by 2020.

Jochem Heizmann, member of the board of management of Volkswagen as well as president and CEO of Volkswagen Group China, said the joint venture will explore all options to concentrate their resources, including existing and future model platforms, technologies and other expertise.

No financial details were disclosed yesterday.

The move is part of Volkswagen’s new push into electric vehicles after its reputation was damaged by a scandal over diesel vehicles rigged to cheat on emissions testing. Volkswagen aims to come up with 30 new models over the next 10 years.

Electric vehicles so far are not a major part of the global car market. But companies are working on them in hopes that battery range will improve, and to meet tougher emissions standards.

The announcement also follows Chinese government policy changes to spur electric vehicle development. The Chinese government sees electric vehicles as an opportunity for China, the biggest auto market by number of units sold, to capture a leading role in a fledgling industry with no established competitors.

Automakers will be allowed to create separate electric vehicle brands that will face less complex ownership and other regulations than traditional internal combustion manufacturers.

That has allowed a flurry of Chinese technology companies with no auto background to obtain licenses to build electric cars.

“They want to raise the technical capabilities of the sector and for that they want better-quality players to enter the sector,” said Namrita Chow, an analyst with IHS Automotive.

The government is trying to encourage sales by offering incentives, including exemption from sales taxes and quotas on new license plates.