Volkswagen Gets Critical Tech Boost in China from Xpeng

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I think many EV fans and followers have been impressed and optimistic about Volkswagen Group’s focus on electrification in recent years — basically, since the big Dieselgate scandal shook everything up. Volkswagen Group came up with one of the first big plans from legacy automakers to roll out dozens of fully electric models, and to make their electrification push their primary focus. However, I think many people have similarly been quite unimpressed with Volkswagen’s software and modern-tech chops. Software and the early ID models were not the best of friends. Volkswagen’s touchscreens are okay, but nothing to write home about in the 2020s. Volkswagen is great at producing solid electric cars (or cars in general) at high volumes around the world. The company makes quality cars and does so at scale. But it could use a hand getting on the cutting edge with the infotainment and semi-autonomous driving.

That’s where Xpeng steps in. Xpeng, as a young “smart vehicle” startup created by tech guys, is one of the best in the world at seamlessly and attractively integrating high-quality tech and software into its vehicles. It may be struggling to scale up and stand above the crowd in the highly competitive Chinese market, and now also in the highly competitive European market, but I still think it’s one of the most advanced, best carmakers on the planet. Volkswagen Group apparently thinks so as well. Having the humility to see that it needed help, Volkswagen partnered with Xpeng 9 months ago to develop tech and cars together. This partnership has been rolling strongly enough that a few announcements have been made since then about expanding their relationship.

At the end of February, they announced fast co-development of two new smart cars. Now, this week, the two have announced co-development of some new electric vehicle architecture. “The Volkswagen Group and XPENG expand their platform and software partnership: Joint development of the China Electrical Architecture, a zonal Electrical/Electronic architecture, to make China-specific electric vehicle models fit for the next leap in innovation,” they write. “Decisive step towards intelligent connected vehicles: Zonal E/E architecture to reduce complexity of electronic control systems and enable fast and cost-efficient expansion of digital services and functions — with continuous system updates ‘over the air’.”

Here’s a bit more: “Together with XPENG, Volkswagen is introducing the China Electrical Architecture (CEA), a zonal Electrical/Electronic (E/E) architecture. Jointly developed by experts from XPENG, Volkswagen China Technology Company (VCTC) and CARIAD China, the CEA will ensure the rapid expansion of digital services in the Volkswagen brand’s China-specific vehicles. Advanced features such as autonomous driving can be seamlessly integrated and continuously updated and extended ‘over the air’ (‘OTA’). At the same time, thanks to the zonal structure, the number of electronic control units in previous systems can be reduced by up to 30 per cent. As a result, the zonal E/E architecture will be cost competitive with local offerings. The new digital network is envisaged to be used in locally produced VW brand electric vehicles from 2026. The move will strengthen Volkswagen’s ‘electric offensive’ and mark the latest decisive step as one of the industry leaders in the age of intelligent connected vehicles (ICV).”

More technical talk can be read in the press release, but you get the idea. The first model using this architecture, an SUV, is supposed to be launched in 2026.

Overall, I’m very bullish on this partnership. Volkswagen has a great legacy brand, but it will benefit tremendously from a partnership that can put it on the cutting edge of modern tech again. Meanwhile, Xpeng could use some extra work (and revenue) and could benefit from a more stable stream of demand. We’ll see.


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Zachary Shahan

Zach is tryin' to help society help itself one word at a time. He spends most of his time here on CleanTechnica as its director, chief editor, and CEO. Zach is recognized globally as an electric vehicle, solar energy, and energy storage expert. He has presented about cleantech at conferences in India, the UAE, Ukraine, Poland, Germany, the Netherlands, the USA, Canada, and Curaçao. Zach has long-term investments in Tesla [TSLA], NIO [NIO], Xpeng [XPEV], Ford [F], ChargePoint [CHPT], Amazon [AMZN], Piedmont Lithium [PLL], Lithium Americas [LAC], Albemarle Corporation [ALB], Nouveau Monde Graphite [NMGRF], Talon Metals [TLOFF], Arclight Clean Transition Corp [ACTC], and Starbucks [SBUX]. But he does not offer (explicitly or implicitly) investment advice of any sort.

Zachary Shahan has 7403 posts and counting. See all posts by Zachary Shahan