Volkswagen Aims for Lower EV Costs With New Production Platform in China

Dow Jones04-17

By David Sachs

Volkswagen will roll out a cheaper electric-car production platform aimed at strengthening its stance in China.

The German carmaker and China's XPeng, partners in the country since last year, have a new framework deal to co-develop electrified and digitized architecture to be used in Volkswagen brand EVs produced in China, Volkswagen said Wednesday. The new platform will anchor four Volkswagen-branded EV models made there from 2026.

Locally-grown EV companies like BYD are challenging foreign carmakers, including Volkswagen, whose market-share in the world's largest car market dropped last year. The streamlined production model will aid the German car giant's goal of reducing costs for its platform in China by 40%, strengthening margins and making it more competitive, Volkswagen said.

"High profitability and a rapid pace of development are crucial for our competitiveness in China's dynamic market environment," said Ralf Brandstaetter, head of Volkswagen's China operations.

No financial details were disclosed. Volkswagen paid about $700 million for a 4.99% stake of XPeng in 2023.

Write to David Sachs at david.sachs@wsj.com

(END) Dow Jones Newswires

April 17, 2024 07:21 ET (11:21 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.

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