As the electric vehicle (EV) market in China continues to surge, the Volkswagen Group is seeking to bolster its presence in this thriving industry. To achieve this, the company has recently announced an expansion of its partnership with local Chinese brands, a strategic move aimed at tapping into new market segments and capitalizing on China’s rapid growth in e-mobility.
The VW Group is set to collaborate with XPENG, a prominent Chinese brand, through a technological framework agreement. The primary objective of this cooperation is the joint development of two VW-branded electric models specifically designed for the mid-size segment in China. These China-specific vehicles will complement the existing MEB product portfolio and are slated for release in the Chinese market in 2026.
In addition to VW, Audi, the premium brand under the Volkswagen Group, has also taken significant steps to strengthen its position in China’s EV landscape. Audi has signed a strategic memorandum with its Chinese joint venture partner, SAIC, with the aim of expanding their existing cooperation. The joint development efforts will focus on expanding the portfolio of fully connected electric vehicles in the premium segment. Audi plans to introduce electric models in market segments where it has yet to establish a presence in China.
The agreements between Volkswagen and Audi with their respective Chinese partners also outline plans for future joint development of new local platforms dedicated to the next generation of fully connected vehicles. These collaborations align with the VW Group’s “in China for China” strategy, which aims to anticipate and respond to buying trends in China at an early stage, effectively leveraging the immense growth potential of the Chinese market.
To expedite decision-making and development processes in the region, Volkswagen is bolstering its local capabilities for e-mobility and autonomous driving. Moreover, the company is expanding its Hefei plant located in east China’s Anhui province into a multifunctional production, development, and innovation hub. This strategic expansion aims to accommodate the increasing demand for EVs in China and reinforce Volkswagen’s commitment to the market.
With these bold steps, Volkswagen and Audi are poised to further solidify their foothold in China’s dynamic EV market. By collaborating with local Chinese brands and strategically developing China-specific models, the VW Group is well-positioned to thrive in one of the world’s largest and most promising electric vehicle markets.
