Volkswagen (VW) is reportedly exploring a joint venture with a Chinese automaker to produce electric vehicles in Germany, potentially marking a significant shift in its operational strategy. The move could enable VW to utilize its underused plants for manufacturing Chinese-designed electric vehicles while benefiting from China’s advanced electric mobility expertise.
According to Manager Magazin, discussions have taken place regarding joint production at VW’s Emden facility, where the company currently builds ID.4 and ID.7 electric models. However, cost concerns from Chinese partners have emerged as a hurdle. A VW executive, speaking on condition of anonymity, suggested that while taking over a plant remains unlikely, other forms of collaboration could still be on the table.
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This proposal mirrors a reverse of Volkswagen’s entry into China in the 1980s, where it partnered with SAIC, offering automotive expertise while leveraging local infrastructure. If finalized, the partnership would allow VW to address its cost pressures and learn from China’s efficiency in electric vehicle production.
Volkswagen is also considering range extenders—small combustion engines that act as generators for electric vehicles without directly driving the wheels. Already popular in China, these systems address range anxiety, a significant barrier for potential EV buyers.
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VW’s Scout brand, set to launch in the U.S., will trial these systems. CEO Oliver Blume has suggested that range extenders could also be integrated into high-volume models, stating, “The range extender is a good argument for taking away customers’ range anxiety during the transition phase to electric mobility.”
While internal discussions about range extenders for European models remain inconclusive, the company has announced broader initiatives to expand its U.S. market share. “If you want to double market share, you have to be even more local,” CFO Arno Antlitz said during a recent speech at the World Economic Forum.
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The proposed ventures and technological shifts come as VW faces significant financial pressures, including a need to cut billions in costs and streamline its investments. With plans for up to 35,000 job cuts and a reduced investment budget, the company is reassessing priorities for global markets.