Volkswagen and Xpeng, develop new architecture to reduce costs in China

Volkswagen and Xpeng, develop new architecture to reduce costs in China

Volkswagen began to develop a new electric vehicle architecture intended Chinese Market and Xpeng. As we know, at the end of last July the German group announced its intention to invest about 700 million dollars in the Chinese car manufacturer. This operation allowed the Germans to acquire approximately 4.99% of Xpeng’s capital.

Now, the two companies have announced that they have started working on this new electrical/electronic architecture that will be used on future BEVs under the Volkswagen brand that will be launched on the Chinese market from 2026. The goal of the new project is to arrive reduce development costs and complexity.


Volkswagen and Xpeng therefore work China Electrical Architecture (CEA). According to what was said, the project is being carried out by experts from Xpeng, Volkswagen China Technology Company (VCTC) and CARIAD China. The new architecture was also designed to allow the rapid expansion of digital services in the German company’s vehicles.

Advanced functions such as autonomous driving can be seamlessly integrated and constantly updated thanks to AI support OTA updates. By reducing the complexity of the system and the number of existing control units, the new architecture is aimed reduce the costs of platforma China Central Platform (CMP) in China by 40% compared to those of the MEB platform. Thanks to the new architecture, the number of control units present in the previous architecture can be reduced up to 30%.

In short, Volkswagen doesn’t studied a new architecture that minimizes wiring and componentsi reduce costs and make cars cheaper to produce. A path followed by several other car manufacturers including Tesla. The purpose of the German Group and this project is rto gain market share in China. The first model resulting from the collaboration between Volkswagen and Xpeng, as we know, will be an SUV. Ralf Brandst├Ąttermember of the management board of Volkswagen, commented:

With our strategy “In China, for China”, we strengthen the innovative strength of the Volkswagen Group in China. By expanding our partnership with XPENG and continuing to integrate into China’s industrial ecosystem, we will more quickly match our products to the needs of Chinese customers. Both partners bring their skills to this end. This increases efficiency, improves cost structures and accelerates the pace of development. High profitability and speed of development are important for our competitiveness in the Chinese market environment. This means we are playing a leading role in the era of connected cars.