Volkswagen and Xpeng collaborate on mass production of first model, aiming to counterattack the Chinese market

Volkswagen announced on Friday that it has officially begun mass production of its first model jointly developed with Chinese electric car maker Xpeng Motors. The German car company plans to launch more than 20 new models in China this year, aiming to achieve a market counterattack. This medium-to-large pure electric SUV named ID. UNYX 08 is part of the largest new energy offensive in Volkswagen’s history in China. In the key market of China, Volkswagen is struggling to catch up with local rivals such as BYD and Geely.

The model will be launched in the first half of this year, marking a comprehensive adjustment of Volkswagen's strategy in the world's largest automobile market: focusing on local development and accelerating the research and development cycle.

Volkswagen has previously said that its new R&D structure in China can speed up model development by 30%. Fengzhong 08 was put into mass production in just 24 months.

Ralf Brandstedt, Volkswagen Group’s board member responsible for China operations, said: “Our ‘in China, for the world’ strategy is paying off.”

“With the help of Fuzhong 08, we will launch the largest electric vehicle offensive in the group’s history in China.”

Europe's largest automaker is heading into another tough year, with tariff pressure and a battle to win back China, its biggest single market, at the center of its challenges, but where VW has been losing ground as local rivals are quicker to roll out cheaper electric vehicles with rich software.

Last year, Volkswagen's sales in China were surpassed by Geely Automobile and fell to third place; as early as 2024, it had been replaced by BYD, ending its decade-long sales dominance in China.

Including more than 20 pure electric and plug-in hybrid models planned to be launched in 2026, Volkswagen plans to launch a total of 50 new new energy vehicles in the Chinese market by 2030.

Zhongzhong 08 is the result of the technical cooperation between Volkswagen and Xpeng Motors in 2023. Xpeng provided the automatic driving system and Turing AI chip for the new car.

The second electric vehicle jointly developed by the two parties will be launched later this year.

Both models will be produced at Volkswagen's Hefei plant, which has an annual production capacity of 350,000 units and also produces the Cupra Tavascan SUV for export to Europe.