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VW considers bringing Xpeng co-developed architecture to European models, report says

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VW considers bringing Xpeng co-developed architecture to European models, report says

Volkswagen is reportedly considering using an electrical/electronic architecture co-developed with Xpeng (NYSE: XPEV) for mainstream models in Europe, potentially expanding the role of China-developed technology across its global lineup.

Germany's Manager Magazin reported on Monday, citing people familiar with the matter, that the China Electronic Architecture (CEA), originally developed for the Chinese market, could underpin future models from Volkswagen, Skoda and Cupra.

Volkswagen core brand chief Thomas Schaefer is expected to present the proposal to group management on October 27. It would cover about 75% of next-generation models across the 3 brands.

If implemented, the proposal would alter Volkswagen's strategy of developing separate software technologies for China and Western markets.

Volkswagen currently uses the architecture co-developed with Xpeng in China, while working with US electric vehicle maker Rivian on a separate technology for Western markets.

The Rivian partnership involves a $5.8 billion investment and is central to Volkswagen Group CEO Oliver Blume's software strategy. Bringing the Chinese architecture to Europe could diminish the US partner's role in the group's technology plans.

Cost is a major driver of the proposal. Schaefer's team estimates that switching to the Chinese architecture for key vehicle segments could save the group €4 billion to €5 billion, according to Manager Magazin.

Potential applications cited in the report include future electric models such as the ID. Golf, ID. Passat and Skoda Enyaq. The mainstream segments these vehicles compete in are particularly sensitive to development costs and pricing competitiveness.

Supporters of the proposal argue that the software and electrical/electronic architecture developed by the Chinese team are already in use and can also support vehicles built on the group's existing European platforms, the magazine reported.


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