Pressing The Expensive Cost Of Electric Car Development, Volkswagen Partners With China's Automotive Brand

Volkswagen ID.4. (Doc. Volkswagen Group)

JAKARTA - German automotive company Volkswagen will partner with one of the Chinese electric vehicle brands, Xpeng, to build an electric SUV.

In the partnership, the two companies will collaborate and share platforms and software with each other to cut the high cost of production.

Reporting from Reuters on Friday, March 1, the announcement of the partnership is the next step that has been established since last July when Volkswagen will buy a 4.99 percent stake in Xpeng worth 700 million US dollars (equivalent to Rp10.9 trillion) with plans to jointly launch two EV models in 2026.

Thus, the giant company is committed to controlling the Chinese market after losing to the local brand. They said that this collaboration would cut development time by more than 30 percent.

"In the world's largest and fastest-growing electric vehicle market, acceleration is fundamental," said Ralf Branstatter, CEO of China's Volkswagen Group.

The car to be produced by this partnership will use the VW badge, but still features a jointly developed platform, namely Edward, coming from the G9 model.

Last year, Volkswagen said it would develop another manufacturing platform in China derived from the MEB architecture for entry-level electric vehicles and use more local components to reduce costs.

The company, based in Wolfsburg, Germany, also invested about 1 billion euros in the latest EV development center in China's Hefei City.

Meanwhile, sales of low-emission vehicles in China decreased in January to 38.8 percent compared to the previous month. Whereas Tesla itself as the main player has given a large discount on the Chinese market but failed to raise demand.