Volkswagen Considers Installing Chinese Software, Cutting Costs by Up to 7 Trillion Won

Foreign media have reported that Volkswagen is considering equipping vehicles sold in Europe with Chinese software to cut costs.

On October 26 (local time), according to the business publication Manager Magazin, Thomas Schäfer, CEO of the Volkswagen brand, plans to present a proposal to the board soon to introduce “China Electronic Architecture,” software jointly developed with Chinese electric vehicle maker Xpeng, in next-generation models such as the ID. Golf, ID. Passat and Skoda Enyaq. The software has so far been installed only in vehicles sold in China. Expanding its use to entry-level models in Europe is expected to save 4 billion to 5 billion euros (approximately 5.9 trillion to 7.4 trillion won).

During its transition to electric vehicles, Volkswagen established the software subsidiary Cariad to develop its own technology, but in 2024 it also changed course and decided to partner with U.S. electric vehicle startup Rivian. The software being developed with Rivian is planned to debut next year in the ID. EVERY1 small car. However, developing the software through RVT, the joint venture with Rivian, is expected to cost four times as much as development in China.

Volkswagen has begun restructuring with the goal of cutting costs by 20 billion euros (approximately 29.6 trillion won) by 2030 and raising its operating margin to 9%, up from 2.8% last year.

This content was produced with the assistance of AI translation services.