Volkswagen plans four sub-$25,000 China BEVs

The Chinese subsidiary of German OEM Volkswagen will develop a new EV platform to cater the entry-level segment of the local market, according to Ralf Brandstaetter, CEO of Volkswagen Group China

As a first step, VW aims to create four vehicles in the RMB140,000-180,000 ($20,000-25,000) on the new platform.

But VW is at pains to stress that this is firmly part of its so-called 'in China for China strategy' and these developments will be strictly for the Chinese market.

The fully-electric new China Main Platform (CMP) will be rolled out "exclusively for China", Brandstaetter says. And it will incorporate "China-specific" solutions for the battery, electric drive, and electric motor, ensuring cost efficiency and rapid market readiness.

VE promises that CMP will reach market maturity in less than 36 months, "around one third faster" than the firm's usual development timescale. It aims to achieve this through new lean processes and new technologies within the development stage, as well as "very early" supplier involvement.

The firm plans to turn Hefei into a hub for so-called intelligent connected vehicles (ICvs), as part of a wider ambitions to reach a range of at least 30 ICV models in China by 2030. This line-up will serve both premium and volume customers.

There are two obvious questions about the move. The first is VW's July link-up with China's Xpeng, as part of which the Chinese OEM will develop two mass-market vehicles for VW on its G9 platform.

It may be that these Xpeng-developed cars will target the B and C segments and at least some of VW's planned four new models will go after different parts of the mass market. But it still raises eyebrows that, if VW had been considering a speedy rollout of the CMP platform, it felt the need to outsource the platform for two lunches in the mean time.

The second is around VW's attitude to the separation of China and non-China markets. Many other Western OEMs are emphasising that one of the advantages of attempting to maintain a position in the cut-throat competitive China market is to pick up EV learnings that can be exported internationally.

Instead, VW seems wedded to ringfencing what it does in China from the rest of its global operations. As well as missing out on synergies, it could also risk alienating Xpeng, which has clear enthusiasm for the idea of taking its VW collaboration well beyond China's borders.