Volkswagen EV-Only Full Development Center Launches in China

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Volkswagen has launched a new testing center in China. Interestingly, there was almost no mention in the announcement that this is an EV-only center.

This is also the first time Volkswagen has built a full development facility in a country other than Germany. “Strategic Milestone reached: For the first time in Volkswagen Group’s history, new vehicle platforms and key technology can be fully developed and brought to market readiness with all approval processes outside Germany,” VW writes. “The new facilities significantly expand the Group’s local R&D strength and integrate software, hardware, and whole-vehicle validation under one roof — enabling faster decision-making, closer customer alignment, and accelerated rollout of next-generation technologies.”

Here’s more on what that means: “Comprehensive capabilities: Around 100,000 m² of space with over 100 advanced laboratories integrating software–hardware testing, battery and powertrain validation, and full-platform verification at the Volkswagen Group China Technology Company (VCTC) in Hefei, Anhui province, completing the centres expansion.”

And here’s a biggie: Chinese automakers have increased development times ridiculously in recent years. Volkswagen is aiming to catch up with this new center. The company plans to cut vehicle development time by 30%. It also plans to introduce a new China Electronic Architecture (CEA) and expects this center will help accelerate its release. And the company claims that it should be able to cut the cost of “specific key projects” by up to 50%!

The company is also looking to bring out a variety of better features through R&D work there — “tailor-made digital cockpit features, advanced driving assistance system (ADAS) functions and over-the-air (OTA) upgrades for Chinese customers.”

Getting back to the EV part, here’s what Volkswagen finally says deep down in the press release about the facility, “VCTC plays a pivotal role in Volkswagen Group’s ‘In China for China’ strategy. As the Group’s most comprehensive R&D hub beyond its home market, it is also the only Group R&D center dedicated exclusively to electric, intelligent and connected vehicles. VCTC is integrating core development units and decision-making processes for local vehicle and technology projects, while coordinating developmental processes with the R&D units of joint ventures. By deepening integration into the local technology ecosystem, VCTC can proactively address China’s market-defining trends — such as digitalization and autonomous driving — at an early stage, allowing the company to fully harness the growth momentum and innovative vitality of the Chinese market.” Did you catch that bit about electric vehicles? Naturally, despite not being highlighted, that tells us where the Chinese auto market is now — and where it’s headed.

Here’s also more about battery testing they will do at the facility: “At the Battery & Powertrain Integration Testing Center, engineers can test up to 500 battery systems per year. Tests cover performance, lifetime, safety and environmental robustness, as well as E-Drive, thermal management, electronics and battery cell components.”

So, does Volkswagen have a solid chance of reviving positive growth in China? How good and effective is this center going to be? Can it be at the level of Chinese EV producers like XPENG, NIO, Leapmotor, or even BYD? That’s what we’ll have to wait to see, but it’s clearly the goal. Does VW also plan to bring some of these learnings and improvements to centers outside of China, like back in Germany? Maybe … but I’m sure that would be much further down the line.

“The new workshops give our engineering teams an entirely new level of integration,” Thomas Ulbrich, CTO of Volkswagen Group China and CEO of VCTC, says. “We can now run software, hardware, and full-vehicle validation processes in parallel, shorten decision loops, and bring innovations to maturity much faster. This environment enables us to push forward next-generation intelligent-vehicle technologies with high precision and efficiency.” We shall see.