BEIJING (May 29): Volkswagen AG (VW) said today it has agreed to invest €2.1 billion in two separate Chinese electric vehicle (EV) players, upping its bet on the world's biggest auto market as international rivals seek to muscle in.

VW said it will invest €1 billion to take a 50% stake in the state-owned parent of Anhui Jianghuai Automobile Group (JAC), also raising its stake in an existing EV joint venture with JAC to 75% from 50%.

The joint venture will launch five more electric models by 2025 and establish a car manufacturing base, VW said.

In a separate transaction, VW said it will pay €1.1 billion to acquire 26.5% of Guoxuan High-tech Co Ltd, a maker of EV batteries, becoming its biggest shareholder.

VW said Guoxuan, based in Hefei like JAC, will supply batteries to its EV models in China.

Reuters exclusively reported on Wednesday that Volkswagen was in final talks to invest in the two companies.

VW is keen to bolster its status as the largest foreign automaker in China even as government measures to control the Covid-19 epidemic have squashed sales.

The moves come as global rivals such as US EV maker Tesla Inc seek to make inroads in the Chinese car market. Tesla last year became the first foreign automaker to wholly own a car plant in China.

Shares in JAC and Guoxuan climbed their maximum daily limit of 10% today morning.