Volkswagen together with Chinese Xpeng developed a new architecture for CEA electric vehicles that will further reduce the cost of future all-electric battery-powered models.
CEA — Volkswagen’s new electric vehicle platform for China
The CEA architecture will be the basis for future Volkswagen electric vehicles developed specifically for the Chinese market. The German automaker plans to switch to it in 2026. The CEA platform will help reduce costs by the targeted 40% compared to the well-known MEB developed in Germany by reducing the number of control units. The architecture uses a central computer and a modular structure to control all electronics and provide various innovative features, such as autonomous driving.
The current market leader in this type of architecture is Tesla, which is gradually reducing the amount of wiring and components in cars to increase efficiency and reduce production costs.
Last year, Volkswagen acquired a 4.99% stake in Xpeng for about $700 million and announced the joint development of two new models to be released under the Volkswagen brand by 2026. At the time, it was reported that both would use the Xpeng (Edward) G9 platform. In February, Volkswagen, which is now scrambling like a frog to a goose to regain ground in China under pressure from local manufacturers, announced that the SUV would be the debut model on the Xpeng platform. At the same time, the partners expected to reduce development time by 30% by combining their efforts and economies of scale.
At the end of 2022, Volkswagen lost its leadership in China to local electric vehicle manufacturer BYD — last year, its share fell to 14% from 18% in 2018 amid a steady decline in sales of ICE vehicles. Now Volkswagen is actively catching up and is primarily increasing its offer in the mid-range and entry-level segments of the electric vehicle market. Last week, Volkswagen announced an investment of €2.5 billion to expand its production and innovation center in Hefei, Anhui Province, China. And the Chinese Volkswagen ID.3 topped the sales charts after a temporary price reduction of the equivalent of $5,100 — to a new low of $17,500.
Chinese-made electric vehicles, in particular the Chinese Volkswagen ID.3 (primarily due to its price), remain the undisputed leaders in the Ukrainian electric car market. This trend is unlikely to change in the near future.