BEIJING, March 13 (Reuters) – Volkswagen said on Friday it has begun mass production of its first model developed jointly with Chinese EV maker Xpeng, as the German carmaker targets a comeback in China with more than 20 new models to be launched this year.
The ID. UNYX 08, a full-size electric SUV, is part of Volkswagen’s biggest-ever new energy vehicle push in China, a key market where it is scrambling to compete with local competitors such as BYD and Geely.
The new model – set to go on sale in the first half of this year – is emblematic of Volkswagen’s revamped strategy in the world’s biggest auto market, prioritising local development and quicker turnaround times.
Volkswagen has previously said its new China-based architecture allows vehicles to be developed 30% faster. The company said it brought the ID. UNYX 08 to production in 24 months.
“Our ‘in China, for China’ strategy is delivering results,” said Ralf Brandstätter, Volkswagen Group board member for China.
“With the ID. UNYX 08, we are launching the Group’s largest electric vehicle offensive in China.”
Europe’s largest carmaker faces another tough year, dominated by tariffs and its battle to win back China – its single largest market, where it has lost ground to local rivals who have been quicker to roll out software-rich, lower-cost electric cars.
Volkswagen was overtaken by Geely Auto in China sales last year, dropping to third place after losing its decade-long dominance to BYD in 2024.
Including the more than 20 battery-electric and plug-in hybrid vehicles set for launch in 2026, Volkswagen plans to bring a total of 50 new NEVs to market in China by 2030.
The ID. UNYX 08 is the result of a 2023 technology partnership with Xpeng, which provides Volkswagen with autonomous driving systems and the Turing AI chips used in the new vehicle.
A second jointly developed EV with Xpeng is set to be launched later this year.
Both vehicles will be built at Volkswagen’s Hefei plant, west of Shanghai, which has annual capacity of 350,000 units and also produces the Cupra Tavascan SUV for export to Europe.
(Reporting by Ju-min Park and Zhang Yan; Editing by Kevin Buckland)
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