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Volkswagen sheds light on its ‘China-in-China’ strategy, implementing local OEM partnerships and tech to reduce vehicle time-to-market by 1/3

May 21, 2024

The Volkswagen Group has outlined its strategy for the Chinese electric vehicle market, outlining its ‘China for China’ local development and procurement plans.

The automaker’s largest development center outside of Germany is in here China, operating as Volkswagen China Technology Company (VCTC), and it plans on expanding its local site in Hefei, China to drive production, development, and innovation. Here’s the scoop:

Reduce time to market –VCTC aims to reduce the time to market for vehicles and components by 30 percent through ‘efficient development processes and the use of cutting-edge technologies’. VCTC says that the testing phase for EVs can be reduced from three months to one month using its ‘E-4 poster system’, which allows them to be subject to the highest loads and in-house endurance testing with active batteries. Their tech stack also allows them to simulate an entire vehicle life cycle, including charging/discharging batteries. They report that these types of tests were previously only possible through special open-air circuits.

They’re also implementing VR into their validation process, allowing for rapid improvements to the body, controls, and ergonomics, saving time and money in the design phase.

So far, they’ve hired about 1,200 workers at the plant, and plan on hitting about 3,000 by the end of 2025.

Local platform –The hub is developing a local electric platform for the entry-level segment. Derived from the Group’s modular electric drive matrix (MEB), the new platform is intended to open up further market segments in China. From 2026, the platform will form the basis for additional battery-powered vehicles (BEV) specifically tailored to the wishes of Chinese customers. Using the rapid time-to-market strategies, they plan on developing this in 36 months, about 1/3 shorter than previous timescales.

XPENG partnership:In February, the company announced an agreement with XPENG to jointly source and develop 2 new battery electric vehicles (info here – https://www.volkswagen-group.com/en/articles/ready-for-next-ev-push-volkswagen-enters-into-agreement-with-xpeng-for-fast-joint-development-of-two-smart-e-cars-18246)

New plant in Anhui:The Volkswagen Anhui plant will start production in a few weeks, producing high-voltage battery systems. To pull it off, they partnered with local OEM JAC Group more info here – https://volkswagengroupchina.com.cn/en/partner/volkswagenanhui