VW Aims To Cut Development Costs In Half With New "Made In China" Car

   Wait, what? Are the people at Volkswagen aware that Europe is waging economic war on China? Could they let industrial efficiency take the better of their sound judgement to do what is right? 

  Only in retrospect will we know what would have been the right decision at the right time but this sounds suspiciously like "business as usual" when the political class is saying "Game over!"

  Now, let's play the devil's advocate for a second: Does it really make sense for Germany to wage economic war on China at this late stage, just as for Japan, when almost all the cards are in Chinese hands? Conversely, can Europe harm China? Yes, probably to some extend but just as was the case for Russian energy at the cost of destroying its own growth. 

  In early 2025, I predicted that we would see major economic changes during the year. They are taking place right now although most countries are still able to paper over the cracks. Let's see for how long. Not much longer to my opinion.

VW Aims To Cut Development Costs In Half With New "Made In China" Car

Volkswagen says it can build an electric car entirely in China at roughly half the cost of producing one in Germany, helped by quicker development, lower labor expenses, easier battery sourcing and a more efficient supply chain, according to FT.

After heavy investment in its new R&D base in Hefei, which includes more than 100 labs for software, hardware and powertrain testing, the company says it can now validate software, hardware and full vehicles at the same time.

According to VW’s China technology chief Thomas Ulbrich, the facility gives engineering teams “an entirely new level of integration,” allowing them to shorten decision cycles and speed up innovation. VW says the development timeline for new Chinese EVs is about 30 per cent shorter than the traditional 50-month process.

FT writes that the carmaker intends to introduce around 30 EV models in China over the next five years as it tries to regain momentum in the world’s largest auto market, where competition from domestic EV makers has eroded its earlier dominance.

Although the strategy began as “in China, for China,” executives say the company is now considering exporting Chinese-built models and applying Chinese-led advances to its global operations.

Other European manufacturers, such as Renault, are also trying to match China’s rapid development pace by simplifying components and relying more on local engineering talent.

Still, VW stands out for the scale of its investment, committing almost €4bn in China since 2022 through efforts including its partnership with Xpeng and its funding of Horizon Robotics, with which it is developing an AI chip for autonomous-driving features.

These moves come as VW continues to cut costs in Germany, where high production expenses and weak European demand have led to a plan to reduce its domestic workforce by 35,000 by 2030.