Volkswagen Group to Open $1 Billion Centre for EVs in China

The Volkswagen Group has disclosed plans to invest around $1 billion in a new state-of-the-art development, innovation, and procurement centre for fully connected intelligent electric vehicles in the southern Chinese city of Hefei.

The announcement was made by the Volkswagen Group at the ongoing Shanghai Auto Show a couple of days ago.

The new company, with the project name ‘100%TechCo’, combines vehicles and components R&D teams with purchasing. This will leverage synergies in the development process and integrate state-of-the-art local technologies into product development at an early stage.

The aim is to align the Group’s vehicles even more quickly with the wishes of Chinese customers and to achieve shorter time to market. With the launch of 100%TechCo in 2024, the development times of new products and technologies will be gradually shortened by around 30%.

Ralf Brandstätter, Group Board Member for China, said that the establishment of 100%TechCo is an important step of our ‘in China, for China’ strategy.

“By consistently bundling development and procurement capacities as well as integrating local suppliers at an early stage, we will significantly accelerate our development pace. This will also strengthen the efficiency of cooperation for our joint venture and increase our profitability,” Ralph said.

For R&D activities, 100%TechCo will not only bundle research and development for vehicles and components in China, for China, but also merge procurement into a joint unit. To this end, local suppliers will be involved in the early stages of product development to integrate the latest technologies and application concepts into new products.

Integration of Projects

In addition, the new company will more closely integrate the development projects of all the Volkswagen Group’s joint ventures in China – SAIC, Volkswagen, FAW-VW, and Volkswagen Anhui.

The new unit is expected to launch in early 2024 and will comprise more than 2,000 employees from procurement and R&D. The CEO will be Marcus Hafkemeyer, Chief Technology Officer of Volkswagen Group China.

Marcus Hafkemeyer, CEO of 100%TechCo, said that with 100%TechCo, they were opening a new chapter in their cooperation with Volkswagen’s joint venture partners in Changchun, Shanghai, and Hefei, as well as the Group’s brands.

“We are fostering seamless collaboration to bring customized products to the Chinese market even faster and more efficiently. In a first step, 100%TechCo will steer the development of the models of the Volkswagen Anhui joint venture based on the MEB platform and will be responsible for the development of China-specific platform requirements and modules with a focus on electric mobility,” he said.

The company is already expected to play a major role in the development of a future Volkswagen brand model to be launched in 2024.

The foundation of 100%TechCo is another important milestone in the Volkswagen Group’s ‘in China, for China’ strategy. It builds on further strategic measures taken by the company to address market-defining trends in China at an early stage and to significantly increase the speed of innovation locally. These include, for example, the recently announced strategic partnership with Horizon Robotics, a leading provider of hardware and software solutions for automated driving in China.