Volkswagen is substantially investing in Chinese electric vehicle production having announced $12 billion dollars earmarked for development and building electric vehicles in that burgeoning market.

The increase in VW’s commitment comes in response to upcoming regulations, including a 2019 requirement for automakers in China to adhere to EV production quotas. Its action plan includes the production of 15 new energy vehicle models (NEV) and 25 locally produced vehicles. Its local vehicle launch will start in the first half of 2018, in conjunction with Anhui Jianghuai Automobile Group (JAC Motors), Volkswagen’s joint venture partner.

The goal is to leverage JAC Motor’s local expertise and platforms to meet government regulations until Volkswagen is capable of venturing out on its own.

In a statement ahead of the Guangzhou Auto Show, Jochem Heizmann, president and chief executive of Volkswagen Group China, said that Volkswagen hoped to increase new energy vehicle sales to 400,000 a year by 2020, breaking a 1.5 million NEV annual sales goal by 2025.

“China is leading the way to the final breakthrough in the adoption of e-mobility and Volkswagen Group China is determined to be at the forefront,” said Heizmann.

All in all, Volkswagen’s long-term broader vision is to build electric versions of all of its 300 models, with expenditures of $24 billion dollars by 2030, per Volkswagen CEO Matthias Mueller’s September announcement ahead of the Frankfurt Auto Show.

China has been one of the world leaders in tighter emissions control regulations over the past year, with new schemes designed to increase EV production.

Among them is a mandate authorizing that 8 percent of Chinese vehicle sales account for electric vehicles, a credit system, and an outright ban on all petrol and diesel cars by 2040. These mandates have helped cooperation efforts between U.S. automakers and Chinese partners.