In an automotive workshop spanning an area equivalent to 16 soccer fields in Hefei, a city in east China's Anhui Province, more than 800 robots are working collaboratively to assemble six different models of new energy vehicles (NEVs).
This workshop is part of Volkswagen's new NEV production facility, designed to address the swiftly increasing demand in the country while facing formidable local competition.
While Chinese electric car manufacturers and suppliers made a strong presence at the bustling showrooms of this year's International Motor Show (IAA) in Munich, Germany, Volkswagen reiterated its commitment to establishing a localized supply chain in the Chinese market.
The German auto giant will forge ahead with an "in China for China" strategy with homegrown partners, Volkswagen CEO Oliver Blume noted in his speech at the IAA.
The global market for NEVs is exploding, with multiple Chinese manufacturers along the industrial chain emerging as star enterprises.
The real story behind the prosperous EV sector is more vibrant than China's ascent in the electric vehicle industry. Technology, capital and markets from around the world, including China, are merging to form a larger industrial landscape that benefits countries transitioning to eco-friendly transportation.
CHINA'S DYNAMIC MARKET
The Volkswagen Group has recently completed the acquisition of a 4.99 percent stake in China's EV startup XPENG to co-develop electric cars. Rather than pursuing a "Chinese-market-for-foreign-technology" approach in the era of traditional fuel vehicles, XPENG has leveraged its proprietary expertise in NEV software.
Through a strategic partnership deal, Volkswagen acquired XPENG's smart cockpit and advanced driver-assistance system (ADAS) technology. The two companies will jointly develop two B-class battery electric vehicle models for sale in the Chinese market under the Volkswagen brand and the production is expected to start in 2026, according to XPENG.
"We will share smart EV technologies and world-class design and engineering capability with each other and learn from each other," said He Xiaopeng, chairman and CEO of XPENG.
"In an intensely competitive and dynamic market environment, we are leveraging the partners' core competencies, thus creating synergies to bring additional products to market faster," said Ralf Brandstatter, Volkswagen AG Board Member for China.
Adjacent to Volkswagen's automobile workshop in Hefei, an industrial park is being constructed to accommodate an increased number of its upstream suppliers. This includes a battery plant jointly built with Chinese battery cell manufacturer Gotion High-tech. Volkswagen has made investments in Hefei-based Gotion High-tech to integrate local suppliers into the company's global supply network, said Erwin Gabardi, the CEO of Volkswagen Anhui. BMW, another German motor vehicle manufacturer, also swung into action to take advantage of China's strengths in the NEV upstream chain. It has signed a long-term agreement with leading electric vehicle battery maker, Contemporary Amperex Technology Co., Ltd. (CATL), to purchase cylindrical cells starting in 2025 for its new electric vehicle models.