Germany's Volkswagen Group announced that its first model jointly developed with China's XPENG has officially entered production in Hefei, capital of Anhui province. This medium-to-large electric SUV is expected to launch in China in the first half of 2026, and it marks another milestone in China-Germany cooperation in the automotive sector. It's the latest example of a German automaker integrating with China's development strategy and strengthening its presence in the domestic market for mutual benefit, a Chinese industry expert said, adding that it also reflects the bilateral cooperation potential highlighted during German Chancellor Friedrich Merz's visit to China in February. As an important step in Volkswagen's “In China, for China” strategy, the ID.UNYX 08 is the first model jointly developed with local partner XPENG. It has taken only 24 months since the two firms' signing of the joint development and technology cooperation agreement to reach mass production.
The new model is equipped with locally developed cutting-edge technologies, including 800-volt ultra-fast charging, an L2 Advanced Driver Assistance System, and the ability to continuously upgrade the vehicle with over-the-air updates, according to the company. “Three years ago, we launched our strong China strategy. It is now unleashing its full power. The car was developed in China for China, with German engineering and local cutting-edge technology," Volkswagen CEO Oliver Blume was quoted as saying on the company's official website. More next-generation products and technologies will follow in 2026, with over 20 new NEV models scheduled for launch throughout the year, the company said.
The launch of the new model demonstrates the German carmaker's deeper commitment to the Chinese market, Cui Dongshu, Secretary General of the China Passenger Car Association (CPCA), told the Global Times. It also highlights the growing opportunities in the electric vehicle (EV) sector, Cui noted. In 2025, China accounted for 68.4% of the world's new-energy vehicle (NEV) passenger market, and Chinese carmakers' share of the global automotive market reached 35.6%, according to the CPCA. Another key factor enabling such cooperation is the strong complementarity between Chinese and German carmakers.
Cui said that as two major players in the global automotive industry, China and Germany have complementary strengths in technological research and development (R&D), manufacturing, and market resources, creating significant potential for deeper collaboration. During Merz's visit to China in February, the automotive industry was highlighted as one of the most important areas for bilateral cooperation. During the visit, Merz took a special test ride in the new Mercedes-Benz S-Class in Beijing, personally experiencing the L2 Urban and Highway Navigation System, jointly developed by the German auto company and Chinese technology firm Momenta, the Global Times reports.
