Volkswagen unveiled another project to gain a presence in the world's largest EV market. The carmaker said it will invest EUR1 billion (US$1.1 billion) in building an EV R&D and procurement center in China, aiming to reduce product development times by 30%.
Volkswagen announced the plan on April 18 at the Shanghai auto show. A new company, expected to be launched in early 2024, will execute the project called 100%TechCo. Volkswagen said the unit will comprise over 2,000 procurement and R&D employees and be led by Marcus Hafkemeyer, chief technology officer of Volkswagen Group China.
According to Volkswagen, deliveries of its battery EV series, ID., grew more than two times in China last year. Its overall BEV deliveries in China were up by 68% from 2021. However, the European automaker has been falling behind its China-based counterparts in the country's EV market. It has taken the "in China, for China" strategy to win over more customers.
Volkswagen said the 100%TechCo project will merge R&D and procurement efforts for EVs into a joint unit. Local suppliers will get involved in the early stages of product development to adapt vehicles to the wishes of Chinese customers faster.
The company said the project is expected to gradually shorten new product and technologies development times by 30%. It also will integrate the development projects of all Volkswagen Group's joint ventures in China, including SAIC Volkswagen, FAW-VW and Volkswagen Anhui.
Hafkemeyer said in an announcement that 100%TechCo will steer the development of models based on the MEB platform from Volkswagen Anhui. In addition, the project includes developing China-specific platform requirements and modules with a focus on electric mobility.
In March, Volkswagen announced it plans to invest EUR180 billion between 2023 and 2027 to boost its businesses. More than 68% of the investment will focus on digitalization and electrification. The ambition encompasses enhancing its battery strategies and increasing competitiveness in digitalization and products in China.
The carmaker just introduced its premium ID.7 EV at the Shanghai auto show this week. Reuters reported that Thomas Schafer, chief executive of Volkswagen Passenger Cars, said the company remains firmly committed to China. Volkswagen intends to launch 10 more EV models by 2026, he added.
