Volkswagen Developing New Architecture for Automated EVs in China

The Volkswagen Group has entered into an agreement with Guangzhou automaker XPeng to jointly develop a new digital architecture for electric vehicles  on sale in China.

The hope is that the China Electrical Architecture (CEA), which will be available on VW vehicles in the country starting in 2026, will make the German company more competitive there.

Once the top seller in China, it is falling behind some of the local big players, in particular, BYD, which was the country’s number one automaker in 2023 and is battling Tesla to be recognized as the world’s biggest EV manufacturer.

The development of CEA will see XPeng’s Electrical/Electronic (E/E) architecture integrated into Volkswagen’s China Main Platform (CMP), bringing a number of benefits, and is being hailed by VW as a “decisive step towards intelligent connected vehicles”.

In a statement issued to announce the news, VW explained: “The CEA will ensure the rapid expansion of digital services in the Volkswagen brand’s China-specific vehicles. Advanced features such as autonomous driving can be seamlessly integrated and continuously updated and extended over the air (OTA).” The architecture will also be used in cars made by XPeng.

Automated functionality is seen as important in the Chinese market, where manufacturers are racing to offer ever more advanced Navigate On Autopilot systems.

Related:XPeng Announces Self-Driving Breakthroughs, Unveils New Car

As well as delivering swifter deployment of automated tech, there will be cost benefits too. Thanks to the zonal nature of the new architecture – as illustrated in the image above – the number of electronic control units used in previous systems will be reduced by 30%.

This should bring a cost saving of around 40% on VW’s Europe-developed MEB platform, allowing lower prices for cars with CEA, meaning they can compete with locally developed models.

Among the vehicles to benefit from the new architecture will be four Chinese-made entry-level compact cars due in a couple of years, plus two VW-badged mid-range models being co-developed with XPeng, starting with an SUV also due in 2026.

Ralf Brandstätter, the VW board member responsible for the company’s business in China, said: “With our ‘In China, for China’ strategy, we are strengthening the innovative power of the Volkswagen Group in China. By expanding our partnership with XPeng and consistently integrating with China’s industrial ecosystem, we will align our products even faster to the needs of Chinese customers. 

“This increases efficiency, optimizes cost structures and accelerates the speed of development. Through such efforts, we are taking on a leading role in the age of intelligent connected vehicles.”

Related:Volkswagen Invests $2.3B to Deploy Autonomous Vehicles in China

Xiaopeng He, Chairman and CEO of XPeng, added: “The technical collaboration on E/E architecture takes our partnership to the next level and on a much larger scale. The collaboration will allow our Smart EV products to be both technologically competitive and cost competitive.” 

Volkswagen has previously demonstrated its desire to make use of local expertise in China by investing $2.3 billion in Beijing company Horizon Robotics.