Volkswagen is accelerating its efforts to increase local capabilities and control within the Chinese market, according to comments made by China CEO Ralf Brandstätter in a recent interview with Handelsblatt. The automaker is outlining ambitious plans to enhance its technological independence and cater to the evolving demands of Chinese consumers.
A key element of this strategy involves the introduction of a unified electronics architecture for all platforms, encompassing both internal combustion engine vehicles and electric models, starting in 2027. Volkswagen intends to develop the software and hardware predominantly in-house, utilizing local teams, representing a significant advancement over the currently planned China Electronic Architecture (CEA). This represents a departure from the current partnership with electric vehicle startup Xpeng.
Further demonstrating its commitment to the Chinese market, Volkswagen also announced plans for an affordable electric vehicle targeted specifically for Chinese consumers. This entry-level model, slated for launch under the Jetta brand in 2026, is projected to have a price equivalent to under €15,000. The development is a collaborative effort involving Volkswagen and its joint venture partner, FAW. Brandstätter indicated that discussions are ongoing regarding additional models potentially positioned within this price bracket.
The shift in strategy comes amidst increasing pressure on Volkswagen due to a substantial decline in electric vehicle sales in China. Sales of electric vehicles in China decreased by 34 percent during the first half of the year compared to the previous year, prompting the automaker to reassess its approach to the crucial market.