Volkswagen developing budget-priced electric cars unique to China

Volkswagen is working on a new electric-car platform specifically for China planned to spawn a range of budget-priced models from 2026, according to news agency Reuters.

The German car maker plans to create a low-cost platform for electric vehicles – known as the ‘A Main Platform’ – using more Chinese-made parts and collaborating with local suppliers.

Shortly after this announcement earlier this week, VW Australia executives told Drive the company is considering Chinese-built vehicles for local showrooms.

The first of the Chinese-focused budget electric cars is the third battery-powered Volkswagen planned for 2026, due to arrive alongside two new electric vehicles being developed with Chinese start-up Xpeng, for the Chinese market.

It will follow a year after the ID.2, a Polo-sized, budget-priced electric Volkswagen city hatch planned to become the company's entry-level electric vehicle in Europe.

The cheaper platform will enable new lower-price, entry- and mid-level electric Volkswagens missing from its current line-up, set to compete in segments currently dominated by petrol-powered cars.

Volkswagen will produce the new electric vehicles in partnership with China’s largest car maker, SAIC (Shanghai Automotive Industry Corporation) – which owns MG and LDV – and FAW (First Automobile Works).

Both are state-owned manufacturers with existing joint ventures with Volkswagen.

The company’s current dedicated MEB electric-car platform – which stands for ‘modular electric drive matrix’ (translated from German) – underpins battery-powered vehicles including the Volkswagen ID.3 hatchback, Audi Q4 E-Tron SUV and Cupra Born hatchback.

The Golf-sized Volkswagen ID.3 hatchback is also sold in China where it is the best-selling electric Volkswagen, but at a lowly 22nd in the sales charts year-to-date.

Its MEB platform has been deemed too expensive to be used in a price-leading Chinese electric car, as sales of domestic brands and ‘New Energy Vehicles’ – the term grouping hybrid, electric and hydrogen fuel-cell vehicles together – rise rapidly.

A total of 2.8 million new cars were sold in China in October 2023, with record sales of New Energy Vehicles seeing almost 1 million sold (956,000) according to the China Association of Automobile Manufacturers (CAAM) – 34 per cent year-on-year growth.

The majority of those – 646,000 – were battery electric vehicles, up 19 per cent year-on-year.

The announcement of the A Main Platform came at the brand's new Volkswagen Group China Technology Company (VCTC) offices, located in Hefei, Anhui Province, west of Shanghai.

The VCTC is set to open as a technology hub in 2024 after a ¥7.76 billion ($AU1.7 billion) investment and bring reduced costs, faster development and manufacture of electric cars. 

Volkswagen announced the VCTC will partner with Chinese electric-car start-up Xpeng, which the German car maker took a five per cent stake of in July 2023, to develop two larger electric cars specifically for China using an older Xpeng platform, also scheduled to go on sale in 2026.