VW believes the new China Electrical Architecture (CEA), a joint project between Xpeng and VW subsidiaries Volkswagen China Technology Company (VCTC) and CARIAD China, will cut costs by as much as 40 percent compared to the current MEB platform used in cars like the ID.4, and make VW's EVs as affordable as those from Chinese brands.
Another project under this initiative is the China Main Platform (CMP), led by VCTC along with SAIC Volkswagen and FAWVolkswagen. CMP focuses on producing more affordable cars than those offered by CEA. It's slated to debut four smaller VW-branded models in 2026.
Ralf Brandstaetter, China boss of VW, emphasized the competitive nature of the Chinese EV market in a statement to Reuters. "Competition is very fierce, and we have to adapt our cost structure to be competitive in this environment," he said.
VW and Xpeng have made headlines together before. In 2020, VW acquired a 4.99 percent stake in the Chinese company for approximately $700 million. This move was part of VW's strategy to improve its performance in China, where it has faced tough competition from local brands and Tesla. VW was a dominant player in China for many years, being the first Western brand to take advantage of the country's sales and manufacturing potential.
Source: Reuters
