Volkswagen bets on China-developed EVs as competition heats up

Volkswagen will launch three EVs in mainland China over the next two weeks using technology from Chinese partners.

The move comes as the German carmaker responds to fierce competition in the world’s biggest auto market.

The ID. UNYX 08 arrives on April 16 with Xpeng’s driver assistance system and CATL batteries, while the ID. AURA T6 is due on April 24, and the ID. ERA 9X is set to debut on April 25.

The ERA 9X also uses an intelligent driving assistance solution from self-driving startup Momenta and a CATL battery with a range extender, while Volkswagen did not disclose prices for the three models.

The launches come as EVs made up 54% of China’s car sales in 2025, but only 4.5% of Volkswagen’s China sales last year.

Its operating profit there fell 44% to 958 million euros (US$1.11 billion).

🔗 Source: South China Morning Post

🧠 Food for thought

Implications, context, and why it matters.

Volkswagen treats the China launch as a rebuild plan

The launches fit Volkswagen’s “In China, for China” strategy, a shift meant to speed up work and regain momentum in its most important market 1.
Spending includes about 2.4 billion euros (US$2.79 billion) for cooperation with Chinese chip designer Horizon Robotics, plus a planned joint venture where CARIAD, Volkswagen’s automotive software unit, is the majority shareholder 1.
The plan targets a 30% cut in development time for China-market models and cost parity with Chinese rivals by 2026 2.
Chinese electric-vehicle makers can move from concept to delivery in about 12 months, which beats Volkswagen’s earlier timelines and adds pressure 3.
Volkswagen is also co-developing a custom processing chip in China through CARIZON, a joint venture between CARIAD and Horizon Robotics 4.

Car tech influence moves from China to the West

Licensing XPeng’s core autonomous-driving software would flip the usual pattern, with a Western automaker buying Chinese AI driving technology 5.
A Volkswagen executive said there is “no reason to stick” with Nvidia, the US chip company, in the Chinese market, which could reshape supplier choices 3.
Competition is moving away from brand heritage and toward in-car intelligence, pushing established carmakers to work with software-company speed and focus 3.
China now serves as a “training center” for global auto giants, since products proven in its fast-moving market can later ship worldwide 3.