One of the knock-on effects of the disappointing sales of ID. and its siblings is that Volkswagen Anhui is no longer relying on MEB.

Written by Xing Ruifang

Edited by Mao Shiyang

Original content by AutoPix (ID: autopix)

01.

More Reliant on Xiaopeng's Architecture

We exclusively learned that Volkswagen Anhui's subsequent ID. models will switch from the original MEB platform pure electric architecture to the CEA architecture in collaboration with Xiaopeng Motors.

A significant reason for this change is the poor sales of ID. UNYX, which was launched in mid-July this year. A source close to Volkswagen Anhui told us that, aside from a small number of bulk orders from major customers, retail sales of ID. UNYX have only amounted to a few hundred units since its launch.

Volkswagen Anhui has decided to change its strategy. We exclusively learned that the first model under Volkswagen Anhui's CEA architecture is expected to achieve SOP by the end of 2025, with the 2026 launch date remaining unchanged. Therefore, the next new model of ID. UNYX, which was originally planned to be launched next year, will be postponed until after the launch of the aforementioned model.

There will not be significant adjustments to the exterior and interior hardware design of the next new model of ID. UNYX. Instead, the electronic and electrical architecture will switch to CEA, and software that has been developed or is near completion will need to be re-adapted to the CEA architecture.

Volkswagen Anhui originally planned to launch four models by 2026, with multiple product lines planned. One line is based on the Volkswagen MEB platform, ID. and its series, with products mainly launched before 2026. Another product line is based on the more localized "CEA architecture + CMP platform," with new models expected to be launched after 2026, which will then become Volkswagen Anhui's primary product line.

Among them, CMP is the manufacturing platform used to replace the current MEB platform. Currently, all ID. products launched by Volkswagen in its two joint ventures, as well as the Audi Q4 e-tron from the Audi brand, are based on the MEB platform.

▍First model of Volkswagen Anhui ID. and its siblings

The new CMP platform was jointly developed by Volkswagen Group China Technology Co., Ltd. (VCTC) and Volkswagen's two joint ventures in China, SAIC Volkswagen and FAW-Volkswagen, with the goal of further reducing manufacturing costs—a traditional strength of Volkswagen and its joint ventures.

The "bottleneck" lies in the electronic and electrical architecture, which has been a hardware reason for Volkswagen's new energy vehicles lacking intelligence in the past few years. New forces and domestic automakers have been able to achieve OTA updates for smart cockpits and autonomous driving, which is still difficult for Volkswagen. In April this year, Volkswagen announced that it would develop the CEA (China Electrical Architecture) in collaboration with domestic automaker Xiaopeng Motors. The CEA architecture largely adopts Xiaopeng's proprietary EEA electronic and electrical architecture.

With the current product adjustment and the fading of MEB, Volkswagen Anhui can only rely more on the CEA architecture.

Currently, the hardware of the CEA architecture is being developed under the leadership of Volkswagen Technology (VCTC), and the challenge of this development is not significant. The real challenge lies in the software. We understand that what Xiaopeng provides to Volkswagen are mainly hardware such as domain controllers, and software matching under the CEA architecture, including smart cockpits and autonomous driving, needs to be developed separately. This work is mainly completed by Volkswagen Technology (VCTC), Cariad China, and Carizon.

Among the three development entities, Volkswagen Technology (VCTC) is the closest to Volkswagen Germany. Established in May 2023 with an investment of approximately 1 billion euros from Volkswagen, it is Volkswagen's largest R&D center outside of Wolfsburg, Germany, while Carizon is a joint venture established by Volkswagen and Horizon Robotics with a 60:40 shareholding ratio.

A source close to Carizon told us that the actual software development is mainly handled by the Carizon team, but project acceptance and demand formulation need to be completed by Volkswagen Technology (VCTC). During the process of transmitting requirements, it also needs to go through Cariad China.

A source close to Volkswagen Anhui revealed that this complex communication method has complicated R&D communication, and the three development entities still need further integration.

Just like Volkswagen Anhui's complex R&D structure, its product and business decisions also face a series of complex constraints.

02.

Local Operations, Local Decisions

Volkswagen's ID. series was introduced to the Chinese market starting in 2020. The originally planned final product was FAW-Volkswagen's ID.7, which was launched last year. The subsequent launches of ID. and its siblings, as well as follow-up products, are Volkswagen's "special supply" models for the Chinese market, no longer following the systems of the two joint ventures. The task of promoting new ID. models has shifted to Volkswagen Anhui.

However, everything is new for Volkswagen Anhui. Besides the still-evolving complex R&D system, Volkswagen Anhui's decision-makers also need a familiarization process with the Chinese market.

At its peak in the Chinese market, Volkswagen sold nearly 5 million vehicles, mainly relying on its two joint ventures, FAW-Volkswagen and SAIC Volkswagen. Therefore, the channels are also concentrated in the joint ventures. What Volkswagen truly controls is only around a hundred import car business dealers, which limits the channel resources available to Volkswagen Anhui.

We understand that before the launch of ID. and its siblings earlier this year, Volkswagen held an investment promotion conference in Beijing. Most of the first batch of Volkswagen Anhui dealers recruited were investors from Volkswagen's import car business.

According to official news from Volkswagen Anhui, ID. and its siblings will expand its sales channels through a combination of direct sales and franchising, similar to mainstream domestic new energy automakers. There are mainly four direct sales stores. As of the launch of ID. and its siblings in July this year, there were 38 stores nationwide. The goal is to cover 20 cities nationwide by the end of this year and 70 stores by the end of 2025.

▍Volkswagen Anhui Executives

In a sense, Volkswagen Anhui is a product of Volkswagen adapting to the competitive environment in the Chinese market, representing Volkswagen's determination to actively seek change. The combination of the CEA architecture and CMP platform, born in China, is Volkswagen's response to competition in the local market.

ID. and its siblings are an exception. When launched in July this year, the MEB-platform ID. and its siblings were priced at 209,900 to 249,900 yuan, sparking much discussion. The new car's price overlaps with that of the Model Y, while the official limited-time transaction prices of FAW-Volkswagen ID.4 CROZZ and SAIC Volkswagen ID.4 X, which are of the same brand and level but have a broader channel distribution, have dropped to as low as 139,800 yuan and 149,800 yuan, respectively.

This locally "special supply" product seems to have a pricing and product positioning that are not suitable for the local market.

Volkswagen Anhui executives have expressed on various occasions that the primary purpose of ID. and its siblings is not sales volume, but rather to emphasize the significance of this car for Volkswagen Anhui's brand and channel resource expansion. When this car was launched, the CEO of Volkswagen Passenger Cars Brand China and Head of Sales for Volkswagen Group China, Stefan Mecha, said, "We are not in a rush to expand our market share. Our vision is to provide a continuously evolving brand and lifestyle, steadily expanding our influence."

However, a source close to Volkswagen China told us that Volkswagen Anhui's decision-making process is lengthy and complex. Although it appears to be self-determined by the company, in reality, Volkswagen Germany and even Volkswagen China, headquartered in Beijing, influence Volkswagen Anhui in various aspects.

According to the plan, starting in 2026, Volkswagen Anhui will launch products based on the CEA architecture, with prices expected to drop to between 140,000 and 180,000 yuan, creating a gap with ID. and its siblings. This is also the more crucial time node mentioned by Volkswagen Anhui executives.

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