Following Tesla steps, Volkswagen AG is in talks with Chinese electric vehicle (EV) firms for investment deals in China. China has established itself as the largest market for electric cars and has been stirring investment interest from automakers from around the world.

The German company is buying 50% of Anhui Jianghuai Automobile Group Holding, the parent of EV partner JAC Motors for 3.5 billion yuan ($491 million) according to Reuters.

In 2019, Tesla ventured into China to become the first foreign company to establish an auto making plant in the south Asian country. With huge interest in environmentally friendly cars, China has become the biggest market for the automobile industry.

Volkswagen is also investing in EV battery maker Guoxuan High-tech Co Ltd, with the aim of becoming the highest shareholder according to the report.

China’s 2018 review of government ownership rules to allow more foreign direct investors has resulted in the surge of interest among western carmakers. And New Energy Vehicles (NEV) is becoming the focus as calls for cleaner energy continue. Volkswagen is keenly looking to retain its position as the highest car producer in China.

China sold 25 million cars at the end 2019 to maintain its position as the world’s biggest auto market. According to Reuters, Volkswagen targeted Anhui Jianghuai, a state owned company in the eastern city of Hefei. Part of its core assets is 25.23% stake in JAC, with a market value of $1.84 billion.

According to people familiar with the matter, Volkswagen plans to make fresh investment in its 50:50 venture with JAC, and build capacity with its modular MEB platform, an architecture enabling efficient production of various EV models.

Volkswagen interest in China is not limited to car manufacturing. Battery is also becoming of huge interest. The company plans to buy about 27% of Guoxuan mostly via a discounted private share placement as well as from top shareholder Zhuhai Guoxuan Trading Ltd, which holds 18%, and the founder Li Zhen, who owns 12%.

The Guoxuan’s market capitalization stood at $4.3 billion, which means that a 27% stake is worth $1.16 billion.

Volkswagen also has investment with another Chinese company, state-owned China FAW Group Corp Ltd and SAIC Motor Corp Ltd.

While the deal remains confidential, Guoxuan has stopped trading its stock since May 20. The company said on Tuesday that Zhuhai Guoxuan and Li Zhen would sell part of their holdings to a strategist whose identity was not made known. It added that the shares will be issued via private offering.

The deal is yet to be finalized and there is a tendency for change in investment sizes according to the sources.

Volkswagen’s big dream to be the biggest player in the automobile industry lies on finding its place in the world’s biggest automobile market, and putting up a fierce competition. The company aims to sell 1.5 million new energy vehicles in China by 2025.

The company told Reuters that it is poised to deepen its relationship with local partners and thereby secure long-term deals.

“Volkswagen consistently searches for ways to strengthen and deepen our relationship with local partners. In this regard we will explore possible options together with all stakeholders to secure long-term success.”

The German automaker is pushing to get over the strains of the 2015 scandal that rocked its market value and cost it billions in fines and legal fees. Volkswagen admitted that it installed software that lowered harmful emissions of nitrogen compounds under test conditions. The case involved 11 million vehicles produced by the Volkswagen Group.

Volkswagen has been made to pay more than €30 billion around the world in fines, compensation and legal costs since 2015 when the scandal became known. The company’s reputation and value went down so fast that investors feared it would take a long time to make up for the losses.

The company has struggled to break off the shackles of the scandal. With a new wave of suits springing up now and then, Volkswagen appears to be tied to the regrettable past. Its executives admitted that the scandal has pushed them to venture into electric vehicles faster than the company should, in a bid to repair the company’s reputation.

The Lagos State Government has approved the increment of Bus Rapid Transit (BRT) fares effective Friday May 29. This was announced by the operator of the BRT services on Thursday.

The Managing Director, Primero Transport Services, the operators of the BRT, Mr. Fola Tinubu said the fares have been increased as a result of COVID-19 exigencies. It could be recalled that the transit service company had on Monday, stopped operation owing to financial loss it has been incurring as a result of skeletal operation and reduced the number of passengers recommended for the sake of social distancing.

Mr. Tinubu told the press: “We are going to increase our pricing effective tomorrow Friday, May 29. We agreed on this after our talk with the Lagos State Government.”

The transport firm got on the negotiation table with the state government in the morning of Thursday, and in the afternoon, the parties have agreed on increment of fares.

“Everywhere commuters are paying N200 for a trip, it is going to be N300 and everywhere commuters are paying N300 per trip, it is going to be N500. We are increasing our fares. We have secured the permission of the regulator, Lagos State Metropolitan Area Transport Authority (LAMATA),” Tinubu said.

He said the development has become a bitter pill commuters have to swallow to keep the buses on the roads, though it appears insensitive due to economic hardship emanating from the health crisis.

“We are doing this not to punish anybody or to victimize anybody but because the circumstances we found ourselves forced us to do it. We need to make sure the company is on a sound financial footing, and if we don’t do this, the buses will not be available in the long run and there will be no way for us to fix buses and bring new buses.”

The Lagos State Government had earlier ordered the BRT services to cut the number of passengers from its capacity of 70 persons per a bus to 20 persons, in order to ensure that commuters observe social distancing.

However, the directive made the sustainability of the BRT services difficult according to Tinubu. He said if these steps are not taken, the BRT will be out of business in no time, and that will bring more hardship on Lagosians.

“The business must be on a solid financial footing. Without this, the company cannot survive, and if the company does not survive, it will even cost commuters more in the long run.

“We understand that this is going to put some hardship on people, but if we don’t do this and the company goes under, it will even cost the people more,” he said.

He added that the number of passengers will also be increased from 20 to 42, but assured that the company will offer world class services. He said with the approved pricing, the era of long queues as a result of bus scarcity is gone, as the firm will be rolling out 320 buses to effect rapid transit.

While the reasons for the hike seem justifiable, it brings questions on the government’s concern about the plight of Nigerians in the face of a health crisis that has crippled economic activities and increased people’s hardship.

Lagos is foremost among the three states in Nigeria that were placed on total lockdown by the federal government. The impact was unbearable on businesses that many workers have been laid off.

Upon lifting the lockdown, those who still have their job are struggling to cope with the high cost of living instigated by the disruption in the supply chain. And the cost of transportation has also skyrocketed due to the application of social distancing that limited the number of passengers commercial vehicles can take, forcing transport operators to hike the fees.

In the wake of this development, many see the BRT as the cheap alternative. Unfortunately, their hope has been dashed by the government’s decision to increase the BRT fares, as it will bring further financial burden upon them.

During the lockdown, the Lagos State Government failed to live up to people’s expectation in distribution of palliatives. Majority of the households in the state were left to fend for themselves in the face of scarcity. In view of this, many believe that the Lagos State Government should have compensated Lagosians by subsidizing BRT transportation in the state.