VW wants to get BYD service with cheap electric cars in China

was 15 years old Volkswagen the best-selling car brand in China. At the end of 2022, the German car manufacturer lost its position to the domestic electric car manufacturer BYD.

Now VW wants to win over Chinese customers with cheap electric cars. Specifically, the section should be: Entry and middle sectionst of electric vehicles will increase.

The cars of German manufacturers are more expensive than those of their Chinese electric competitors due to high production costs. The ID. 3 it only became one of the best-selling electric models in China because Volkswagen cut the price of the car by a cool $5,100.

In the future, Volkswagen wants to produce its electric cars for the Chinese market at a cheaper price to be able to match the domestic competition. For this purpose, a new compact car platform is planned, which Volkswagen will develop with its Chinese partner Xpeng plant

Together with The “China Electric Architecture” (CEA) designed specifically for China is intended to save 40 percent of production costs compared to the MEB platform designed in Germany. This is achieved, among other things, by reducing the number of control devices through the main computer. Two models according to CEA are scheduled to come to market from 2026, the first being a small SUV.

Government subsidy to BYD

In addition to production costs, the Chinese government’s subsidies to its domestic companies are also causing problems for VW. According to a study by the Kiel Institute for the World Economy (IfW), Chinese electric car manufacturer BYD in particular will receive large subsidies. In 2022 it should be 2.1 billion euros. Based on sales, this corresponds to 3.5 percent. BYD also receives more bonuses for the purchase of electric vehicles than all other domestic manufacturers or foreign companies that produce domestically.

Since October 2023, the European Union Commission has been investigating Chinese subsidy practices to be able to introduce tariffs to protect European manufacturers if necessary.