Volkswagen Group unveiled its artificial intelligence development roadmap for the Chinese market on Tuesday, announcing the full integration of its "Intelligent Agent AI" technology into models built on a China-exclusive architecture starting in the second half of this year. This initiative represents a core component of the most extensive smart and electric vehicle offensive in Volkswagen's history in China, designed to use intelligent experiences to reverse a market situation where it has been surpassed by domestic brands.
The Chief Technology Officer of Volkswagen China stated that a car should become a "partner" capable of anticipating a driver's needs. The new generation of in-car AI assistants will incorporate technologies from local tech firms such as Tencent, Alibaba, and Baidu, utilizing locally trained large language models with all computations performed on the vehicle's system without relying on cloud connectivity. This means users will be able to achieve precise control over most vehicle functions through voice commands.
Simultaneously, Volkswagen is accelerating its technological iteration by deeply integrating with the Chinese supply chain. The group has taken stakes in XPeng Motors and chip manufacturer Horizon Robotics. The first models jointly developed with XPeng will be equipped with the latter's Turing AI chips, moving away from using Nvidia products. This "In China, for China" localized R&D model enables Volkswagen to shorten new vehicle development cycles by approximately 30%.
The urgency behind Volkswagen's transformation stems from a sharp decline in its market share. Data shows that BYD Company Limited and Geely surpassed Volkswagen's sales in China in 2025, pushing it down to third place. Younger generations of consumers increasingly view traditional German cars as "their parents' brands," showing a preference for domestic electric vehicles that offer distinct technological appeal, akin to "smartphones on wheels."
To regain market initiative, Volkswagen plans to launch more than 20 new energy vehicle models by 2026, maintaining an extremely high frequency of roughly one new model every two weeks. This product offensive, internally referred to as "China Speed," signifies the century-old automaker's attempt to demonstrate it still possesses strong competitive momentum amidst the waves of electrification and intelligentization.
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