German automotive giant Volkswagen announced that it has achieved the capability to develop entirely new vehicles outside its home country of Germany for the first time in its history. With this strategic move, the company has decided to manufacture its electric vehicles in China. This plan will shorten the development process and reduce costs by up to 50 percent.
Volkswagen Focuses on China
Volkswagen officially announced the opening of its first test workshop in Hefei, China. This facility allows the company to independently develop and directly launch new vehicles outside of its home country. Established as part of its “in China, for China” strategy, this new development center enables the local design, testing, and production of smart and connected vehicles.
Speaking at the center’s opening, CEO Oliver Blume stated that this step will make Volkswagen faster and more efficient. The company states that the new facility can shorten development time by 30 percent and significantly reduce costs by leveraging local technology and suppliers.
Volkswagen Group China Technology Company (VCTC), established in Hefei, stands out as the company’s largest R&D base focused on electric, smart, and connected vehicles.
By collaborating with local technology companies, Volkswagen aims to keep pace with trends in the Chinese market, such as autonomous driving, digital cockpits, digitalization, and advanced driver assistance systems. The company is working on its first software-defined platform, the China Electric Architecture (CEA), and vehicles equipped with this platform are planned to be delivered to customers within 18 months.
This center in Hefei houses more than 100 laboratories for hardware and software testing, battery and powertrain validation processes, and platform control. Engineers at the Battery and Powertrain Test Center can test up to 500 battery systems annually.
These tests cover a wide range of aspects, including performance, lifespan, safety, and environmental durability. They also examine electric motors, thermal management, electronics, and cell components. With this new facility, Volkswagen plans to export electric vehicles developed in China to foreign markets such as the Middle East and Southeast Asia.
