Volkswagen is considering installing software it jointly developed with China's Xpeng in vehicles sold in Europe. Thomas Schäfer, chief executive of the Volkswagen brand, will soon present to the board a plan to adopt the "China Electronic Architecture" (CEA) in next-generation models including the ID. Golf, the ID. Passat and the Skoda Enyaq, German business outlet Manager Magazin reported on the 26th.
Only a few years ago, Chinese automakers were learning technology from European and U.S. carmakers. Now the flow has reversed, with Chinese firms lending their technology to Western automakers.
The software had been fitted only to vehicles sold in the Chinese market. Expanding it to mass-market models in Europe could save 4 billion to 5 billion euros (about 5.9 trillion to 7.4 trillion won). Using Chinese-developed software would cut costs and shorten development times.
Volkswagen has revised its software strategy repeatedly. During its shift to electric vehicles, it set up the software unit Cariad to pursue in-house technology, then changed course in 2024 to partner with U.S. electric vehicle startup Rivian. The software being developed with Rivian is set to debut next year in the ID. EVERY1 compact car. But building software at RVT, the joint venture with Rivian, costs four times as much as developing it in China, automotive outlet Elektroauto reported.
Across the group, meanwhile, Volkswagen has launched a sweeping restructuring, aiming to cut 20 billion euros (about 29.6 trillion won) in costs by 2030 and lift its operating margin to 9% from 2.8% last year. Last month, management drew up an additional restructuring plan, approved by the board, to cut up to 100,000 of its roughly 660,000 employees worldwide and to review alternative uses for four plants in Germany. The company is also reported to have set a guideline freezing wages at most of its sites through 2030.