Volkswagen and XPeng launch series production in China

Volkswagen AG and Chinese XPeng Inc. officially began mass production of the first jointly developed electrical car (EV) in China.

The fresh SUV, labelled ID.UNYX 08, entered production on Friday, March 13, at Volkswagen (Anhui) Automotive Co. Ltd. It is simply a joint venture in which Volkswagen has a majority stake. According to both companies, the vehicle is to be sold in the first half of 2026. The second model, besides developed jointly by both companies, is planned for this year.

The launch of production is the next phase of cooperation initiated in July 2023. At the time, Volkswagen and XPeng agreed to jointly make 2 electrical models based on the XPeng platform. To cement the alliance, Volkswagen invested about $700 million in XPeng, acquiring 4.99% of the company's stake.

Since then, the scope of cooperation has extended far beyond the bodywork and software platforms themselves. Partners are presently working together on electrical and electronic architecture (CEA), integrated circuits for on-board computers and advanced driver support systems (ADAS). Importantly, CEA architecture, originally dedicated to electrical vehicles, is now besides adapted to hybrid and combustion models. The debut of the first car equipped with the CEA strategy is scheduled for 2026.

Partnership is evidence of how Western producers adapt to the dynamics of the Chinese EV market, benefiting from local technologies and supply chains. For XPeng, the alliance means confirming the technological and marketplace value of 1 of the world's largest automotive players. This evidently strengthens XPeng's position in the country and opens the door to abroad markets.

Model ID.UNYX 08 is part of Volkswagen's largest product offensive in the electrical section in China. This year 20 locally developed models are expected to hit the market. 13 of them will wear the Volkswagen logo, suggesting that any of the novelties will besides be introduced under the Audi brand, owned by the company. However, Volkswagen did not specify the division of production between long-term joint ventures with FAW (First Automobile Works) and SAIC (Shanghai Automotive manufacture Corporation) and fresh Volkswagen Anhui plants.

The price scope for the model ID.UNYX 08 has been determined: 209 900 to 249 900 RMB, or about 113 to 135 1000 PLN.

Volkswagen Anhui, founded in 2017 as JAC Volkswagen Automotive Co. Ltd., is the 3rd joint venture of the company in China. After the government lightened the limits of abroad participation in the automotive sector, Volkswagen increased its share of this entity to 75% in 2020. The another 25% belongs to Jac Motors. This plant besides produces the Cupra Tavascan model for exports to Europe.

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By way of derogation: abroad producers in China are divided into 2 strategical groups.

The first, represented, among others, by Ford, focuses on the usage of the Chinese production base and cost advantage to support exports, giving up the fight for local marketplace shares.

The second group, which includes Volkswagen, considers maintaining its position in China as a priority, setting up local partnerships (e.g. with Horizon Robotics, Gotion High-Tech or ThunderSoft) to make cars tailored to the Chinese consumer.

Similarly, Nissan, in collaboration with the Dongfeng Motor Group, introduces fresh generation drive models, and Toyota, through a joint venture with the Guangzhou Automobile Company (GAC) offers EV vehicles developed by local teams, utilizing Chinese supply chains and intelligent driving technologies.

Source:

• https://www.volkswagenag.com/zh/News/2023/07/Volkswagen-Group-and-XPeng-announce-strategic-partnership.html
• https://auto.sina.com.cn/news/2024-07-24/detail-infwkqye7358968.shtml
• https://www.yicai.com/news/101963820.html

Author: 梁安基 Andrzej Z. Liang, 上海 Shanghai, 中国 China

Email: [email protected]

Editorial: Leszek B.

Email: [email protected]

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