Volkswagen announced that it has developed a new architecture together with Chinese carmaker XPeng to build Volkswagen-branded electric vehicles (EVs) for the Chinese market. The company said this is done to mainly help reduce manufacturing costs, according to a report by Reuters.
The specific architecture the German carmaker is using is the China Electrical Architecture (CEA). Products built using this platform are expected to be introduced by 2026.
Volkswagen says utilising the CEA platform helps reduce manufacturing costs by around 40%. This is compared to the brand’s in-house MEB platform which underpins its EV models such as the ID.3, ID.7, and ID.Buzz.
The reduction in manufacturing cost is made possible by the reduced number of control units utilised. This type of architecture controls all of the vehicle’s electronics via a central computer and a zonal structure to make features like autonomous driving possible.
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Tesla is among the first carmakers to utilise such architecture. By using fewer wires and components, the cost of manufacturing can be reduced significantly.
Volkswagen Member of the Board of Management, Ralf Brandstatter said, “Competition is very fierce, and we have to adapt our cost structure to be competitive in this environment.”
“It’s a decisive step in our development of China-specific, intelligent connected vehicles, and the acceleration of our strong ‘In China, for China’ strategy,” Brandstatter added.
This collaboration between the two firms was made possible after Volkswagen bought 4.99% of XPeng’s stake for approximately $700 million last year. As a result, two Volkswagen-branded EVs, which are said to be SUVs, are set to launch by 2026.
With the new architecture and more affordable EVs, Volkswagen hopes to regain its market share in China, as the brand has been losing to local Chinese rivals such as BYD in the past few years. The German marque’s market share in China dropped from 18% in 2018 to only 14% in 2023.
XPeng will be entering the Malaysian market soon as Bermaz Auto has been awarded the Malaysia distributorship for the brand. Although not officially confirmed, the XPeng G6 EV SUV will most likely be the Chinese brand’s first model to be launched in Malaysia as it is said to be the first XPeng model to receive the right-hand-drive treatment as part of the marque’s new global push.
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