Volkswagen moves closer to electric cars with Chinese joint venture

German carmaker Volkswagen has made the first step into exploring the prospect of electric cars after signing a preliminary deal with Chinese manufacturer Jianghuai Automobile for a joint venture.

A formal agreement is expected to come within the next five months, according to a stock exchange filing from the Chinese company.

The Asian country has recently overtaken the United States to become the world's largest producer of purely electric vehicles.

Volkswagen has confirmed the deal, which would see both companies taking a 50% stake in the venture.

The German company has upped its efforts to battle emissions following its role in a cheating scandal which has cost it billions of dollars. It said in a statement that the cooperation with JAC Motor was a sign of its commitment to developing "zero-emission mobility".

Despite the estimated $20bn bill run up by Volkswagen in fixing cars caught up in "Dieselgate", CEO Matthias Mueller said that their investment in China will not drop off.

The Chinese government requires that foreign companies wanting to invest in the country team up with local businesses to encourage better knowledge and expertise.

"This cooperation would not only benefit our two organizations, but would also be of great value to our customers, a sound environment and the Chinese society in general," Mueller said in a statement.