"Substance over prestige"... Volkswagen to deploy Xpeng architecture in Europe

*This content was translated by AI.View Original

The Volkswagen Group is reportedly considering introducing the electric/electronic (E/E) architecture jointly developed with Chinese electric vehicle maker Xpeng into its next-generation flagship models for the European market.

What Volkswagen aims to adopt is the "China Electronic Architecture (CEA)," which was originally developed targeting the Chinese market. Volkswagen plans to apply this architecture to approximately 75% of the next-generation models from three major brands under the group, including Volkswagen, Skoda, and Cupra. Thomas Schäfer, CEO of the core Volkswagen brand, is scheduled to report this proposal to the group's management.

The primary background behind this transition review is cost reduction. The team led by CEO Schäfer estimates that switching to the China-based architecture in key vehicle segments could save the group between 4 billion and 5 billion euros. This amounts to approximately 5 trillion won. Models targeted include electrified versions such as the ID. Golf, ID. Passat, and Skoda Enyaq.

If this plan is realized, it will bring significant changes to Volkswagen's existing software strategy. Volkswagen has previously applied the jointly developed architecture with Xpeng for the Chinese market while pursuing separate technology through its partnership with US-based Rivian for Western markets. However, this move raises concerns that the weight and role of the Rivian partnership may be reduced.

However, within Volkswagen, there are also voices expressing concern over technical risks and additional adaptation costs associated with aligning with the European regulatory environment. Additionally, it is reported that opinions are divided internally, with the Rivian collaboration camp raising concerns about cost-sharing due to the reduction in technology adoption.

The cooperation between Volkswagen and Xpeng began in July 2023 with a $700 million investment from Volkswagen. In August 2025, the scope of cooperation was expanded to internal combustion engine and plug-in hybrid electric vehicle (PHEV) platforms, aiming to shorten software update cycles and achieve economies of scale. If the introduction into the European market is ultimately confirmed, the technological collaboration between the two companies is expected to expand beyond Asia to a global base.

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*This content was translated by AI.View Original