Volkswagen Announces New Low-Cost Electric Platform For China

Volkswagen has confirmed it is developing an all-new low-cost platform for electric cars in China, which will be locally developed and sourced. The new platform will largely use local components and has been dubbed the 'A Main Platform' by the German automaker. The news was announced by the company’s China chief Ralf Brandstaetter during the opening of the new EV development and procurement centre - Volkswagen Group China Technology Company (VCTC) in Hefei. The new facility has been built with an investment of around $1.1 billion (around Rs. 9,100 crore) under the ‘China for China’ strategy and will create over 2,000 jobs. 

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The new ‘A Main Platform’ will be China-specific but is said to have been derived from the modular electric drive matrix (MEB) platform that underpins Volkswagen’s new ID. electric vehicle range. The first offering, based on the new entry-level platform will arrive by 2026 in China with a development time of 36 months, which the automaker says has reduced by 30 per cent than its previous product development timelines. 

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Speaking about the new strategy, Ralf Brandstätter, Volkswagen AG Board Member for China, said, “With our ‘in China, for China’ strategy, we are fully integrating ourselves into China's industrial ecosystem. This enables us to customise our products even faster to meet the needs of Chinese customers. In a dynamic market environment, a high pace of development is crucial for competitiveness. The Volkswagen China Technology Company in Hefei is the central interface between all our joint venture companies and our Chinese partners, allowing us to make all decisions on products for China directly in China and launch them onto the market quickly. This boosts efficiency, increases the speed of development, and optimises our cost structure.”

The new platform will enable the development of China-specific solutions including the battery, electric drive and motor that will be used for the entry-level electric car range. The company says this will ensure high cost-efficiency and rapid market readiness. 

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At present, the Volkswagen ID.3 is the automaker’s most accessible EV in China. A recent price cut helped improve the sales of the ID.3 from an average of 2,200 units per month until July this year to about 10,000 units per month between July and October. The company is now eyeing a price band between 140,000 Yuan and 170,000 Yuan (around Rs 16.70 lakh and Rs 20.30 lakh) for its new affordable EV. VW was the best-selling carmaker in China until 2022 when it lost ground to China’s BYD. The higher adoption of EVs and declining sales of internal combustion engine (ICE) vehicles, led to the shift in power. The automaker is now for a turnaround with its new strategy as it takes on the more cost-competitive local electric vehicle makers in the entry-level EV segment. 

Volkswagen plans to bring four EVs based on the new entry-level electric platform through its joint ventures with Chinese firms SAIC and FAW. The companies are already producing the MEB-based electric vehicles. Furthermore, the carmaker plans to add two additional electric models that are being developed in partnership with local player XPeng. This brings the brand’s future product count to six new models in the entry and mid-level lineup. Globally, Volkswagen has announced its plans to launch 10 new electric cars in the next three years. In India, the automaker is expected to bring the Volkswagen ID.5 electric SUV to the market sometime next year as a Completely Built Unit (CBU).