Volkswagen is reportedly planning its own vehicle platform (derived from the current MEB) in China for low-cost electric cars to meet local customer needs better – as many components as possible are to be sourced from China. Only later would the platform possibly be used in other countries.

The German newspaper Handelsblatt reported the development, which cited Ralf Brandstätter, head of China for VW. There is already a concrete timetable: from 2026, four additional electric models with a price range of 140 000 to 172 000 yuan (€18 000 to 22 000) will be launched on the Chinese market.

Big challenge

This is a considerable challenge, given that only three years are left to develop the platform and models Brandstätter had promised. The VW brand in Europe, under then CEO Brandstätter, has a rather complicated history when it comes to creating an affordable electric car.

The series version of the ID.2all concept will be presented in 2025 and will start at just under €25 000, presumably with an LFP battery in the basic version. However, it isn’t a finalized model yet.

Brandstätter’s successor at the brand’s helm, Thomas Schäfer, has held out the prospect of an even cheaper model for around €20 000 for 2026 or 2027.

In China, things are now set to move faster. According to Handelsblatt, the new electric platform will be developed by the subsidiary Volkswagen China Technology Company (VCTC) in Hefei in eastern China.

The new, as yet unnamed platform is to be brought to market maturity in just 36 months, according to Volkswagen Group China. This is “around a third shorter than the Volkswagen Group’s previous platform development cycle”.

The subsidiary Volkswagen China Technology Company (VCTC) in Hefei will already integrate technologies from local suppliers in the early development phase. Incidentally, the VCTC is located directly at VW and not at one of the joint ventures with FAW or SAIC.

In order to achieve this speed and the high level of local supply, a 450 000 square meter supplier park is being built in Hefei for around 1 100 local companies and their hardware and software solutions.

The aim is to gradually increase the localization rate to up to 100%. There are currently 1 200 specialists working at the VCTC in Hefei. By the end of next year, there should be around 3 000.

“By closely linking our development team and our purchasing team and involving local suppliers and partners as early as possible in product development, we are continuously improving productivity and transforming ourselves,” says Han Hongming, Chief Technology Officer of Volkswagen Group (China).

“We need to be faster and more agile. In addition, we use innovative technologies to speed up development, testing, and production processes from a safety perspective. One thing is clear: we remain true to Volkswagen’s DNA and our commitment to quality and safety. No compromises,” he added.

Lagging behind

In China, Volkswagen has not been able to transfer its long-time market-leading position from the world of combustion engines to electric mobility. Regarding electric cars, VW is lagging behind the competition in China.

According to Handelsblatt, Volkswagen’s electric car sales in the world’s largest car market in the first three quarters of 2023 were almost 16% lower than in 2022 for the same period.

Brandstätter wants to counteract this with the new platform and has received approval from the Group’s top management for the China-exclusive solution. VW did not specify the size of the budget for the new platform.

The platform, which is initially only intended for China, could also be used in other markets at a later stage. If the technology proves competitive, it would be open to everyone.

Six models

VW is not only relying on its own technology in the race to catch up in China. The German company has concluded a partnership with Xpeng in the summer. Like the four affordable electric cars based on the new platform, two electric mid-range models from VW will also be launched in 2026, developed jointly with Xpeng as part of that agreement.

“We are developing Hefei into the center of our ‘in China, for China’ strategy and a strong interface between all our joint venture companies and local partners. This boosts efficiency, increases the speed of development, and optimizes our cost structure,” said Bei Ruide, General Manager of the Volkswagen Group in China.

The six China-specific models will then complement the MEB series and ensure increasing sales. This means that VW assumes the new models will be more attractive to Chinese customers than its MEB vehicles.

Finally, VW has also adjusted its China targets. Handelsblatt writes that the Wolfsburg-based company no longer strives for market leadership in China. It wants to be “one of the three largest car manufacturers in China and the largest international manufacturer in the Asian country”.