Volkswagen, costs reduced by 40 per cent in China following the Tesla model
The German giant has announced the development of a new architecture for electric cars with Chinese partner Xpeng. Here's how it will work
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Key points
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The Volkswagen group is on a full offensive to regain momentum in its main market, China, accounting for 3 million units, a third of its global sales. The leading European carmaker said on Wednesday that it had developed a new architecture for electric cars with Chinese partner Xpeng (-49% at the Nyse since the start of the year), which according to the German carmaker (+21% performance of its ordinary shares since the start of the year) will enable it to offer electric and intelligent vehicles at more affordable prices in China, where the price war started by Tesla and continued by local giant BYD has been raging for over a year.
Volkswagen plans to use the China Electrical Architecture (Cea) in locally developed VW-branded Ev (electric vehicles) from 2026.
The CEa is expected to enable a 40 per cent cost reduction for the platform developed in China compared to the Meb platform developed in Germany by reducing the number of control units, the company added. The architecture uses a central computer and a zonal structure to control all the electronics and realise functions such as autonomous driving. In short, it follows the example of Tesla, which has been struggling for the past few months but is still the market leader in this type of architecture, which reduces the wiring and components of a car to make it more efficient and cheaper to produce.
What exactly does cost reduction mean
?Reducing costs means simplifying digital hardware: fewer control units and fewer chips, perhaps similar ones, that perform a single function instead of a series of tasks, from infotainment management to climate control via battery management to the increasingly important Adas (driver assistance systems).
It is a paradigm shift in design and production that also marks a new approach to component suppliers, and this means abandoning the old modus operandi of introducing on-board functions (perhaps for a fee as an optional extra) with the addition of modules and control units. Now the digital and electric car 4.0, and we can see this in the many new models on the way, is governed, as Tesla teaches us, by a single central system, a single mother of all control units, instead of the myriad of modules that made it up until now with enormous waste of microprocessors, exploited for just a few functions, or even just one, and poor integration and efficiency (which is the key to sustainability).
