Volkswagen Group, which saw its market share shrink in China last year, said it plans to launch 30 new electric cars in China by 2030 as it vies to keep up with the rapid pace of electrification in the world’s largest vehicle market. Ralf Brandsatter, VW’s China Chief Executive, said the company plans to sell 4 million cars in China by 2030, which could account for about 15% of the market. Volkswagen has been market leader in China’s automotive industry since it established a Shanghai-based joint venture in 1984, delivering 3.2 million cars – the vast majority petrol-powered – in China last year, up 1.6% from 2022. It narrowly beat Shenzhen-based BYD, the world’s bestselling EV builder, which sold nearly 3 million battery-powered cars to Chinese buyers last year. “We want to remain the No 1 international OEM ” Brandsatter said. “In China, we want to be on par in cost and tech with local players with a profitable and healthy business model.” He added that VW would tap its partnerships in China to rev up development of new electric vehicle (EV) models while reducing production costs. It reported sales of 191,800 electric cars in China last year, up 23.2% from 2022.
However, Volkswagen’s share of the broader Chinese vehicle market slipped to 14.2% in 2023, down 0.6 percentage points from a year earlier, according to the China Passenger Car Association (CPCA). In China, where four out of every 10 new vehicles are powered by batteries, the surging popularity of electric cars has ratcheted up pressure on conventional carmakers like Volkswagen and Toyota to get on board with the shift to environmentally friendly motoring.
New-energy vehicles (NEVs) – including fully electric and plug-in hybrid cars – will make up about half of new car sales in China by 2030, as state incentives and an expanding network of charging stations win over more customers, Moody’s Investors Service said in a research report. “We expect that by 2026, we will be fully competitive compared with the best players in terms of advanced driver assistance systems (ADAS) and other smart technologies,” Brandsatter said. He expects VW to launch 20 new electric models for the Chinese market in the next three years. Volkswagen aims to reduce the time it takes to develop its cars by more than 30% while cutting costs by up to 40% as it beefs up its investment in China’s EV sector.
In February, the company signed an agreement with Chinese electric-car maker Xpeng to jointly develop two mid-sized battery-powered vehicles for the highly competitive Chinese market in 2026. The new EVs, bearing the VW badge, will be designed and built based on “joint purchasing activities” and sharing of technologies, the two companies said. VW owns 5% of Xpeng following a USD700 million investment last year. VW has also partnered with autonomous driving tech firm Horizon Robotics and ThunderSoft, an in-car entertainment developer, to create a new generation of EVs. It owns three car making ventures in China with state-owned Chinese companies FAW, SAIC and JAC. VW also owns a 25% stake in Gotion High-Tech, a leading Chinese EV battery producer, the South China Morning Post reports.
Newly published figures in the International Energy Agency’s annual Global Electric Vehicle Outlook show that in the first quarter of 2024, sales grew by about 25% compared with the same period last year. The number of EVs sold globally in Q1 2024 is equivalent to that in all of 2020. Based on current trends, it is estimated that by 2030, almost 1 in 3 cars in China will be electric, and 1 in 5 in both the U.S. and the European Union.
