The next electric Volkswagen, Skoda or Cupra you can buy in Europe may run on software developed in China. According to a report, VW core brand chief Thomas Schäfer wants to use the group’s China Electronic Architecture across roughly three-quarters of next-generation models from those three brands. It’s a plan, not a decision, and VW declined to comment.
VW
What It Means For Drivers
From a report cited by Reuters, we know that the architecture is the electronic backbone behind a car’s software, including over-the-air updates. The main draw is price. Schäfer’s team reportedly estimates savings of about $4.5 billion to $5.5 billion on the most important segment, and development hours in China cost about a quarter as much as at the Rivian joint venture in Palo Alto. The next electric Tiguan could cost roughly $9,000 less to develop. Whether that reaches the sticker is unknown. VW has been fighting to hold its ground against cheaper Chinese rivals, so cost is the obvious motivation.
Not Really “Chinese” Software
VW and Xpeng began working together in 2023, when VW invested $700 million in the Chinese EV maker, and the architecture was built for China first. According to the report, VW holds the intellectual property rights, so this isn’t a ready-made purchase from a supplier. Reports say the system is already used in production vehicles in China.
VW
The plan would reportedly replace the separate technology VW has developed with Rivian for Western markets, a $5.8 billion partnership central to CEO Oliver Blume’s software strategy. Rivian’s supporters worry that reduced use could affect cost-sharing, and some inside VW doubt that adapting the system to European rules will be simple or cheap. Questions about data and security weren’t addressed in either report.
What To Watch
The first Rivian-based car is expected to be the entry-level electric hatchback due in 2027, based on the ID. Every1. Whether or not it keeps that software is a good early sign for things to come. Porsche has also been leaning on China to solve problems at home, so VW isn’t the only German name looking east.
About the author
Yash Bajaj
News Editor