Volkswagen and SAIC agree to prolong their partnership until the year 2040.

In the rapidly evolving automotive industry, electrification and intelligent vehicles are becoming defining trends. This is according to Wang Xiaoqiu, chairman of SAIC Motor.

SAIC Motor's subsidiary, SAIC Volkswagen, is taking these trends seriously, with plans to accelerate electrification efforts. The company aims to launch 18 new models by 2030, including eight electric vehicles.

Volkswagen Group, SAIC Motor's global partner, is also actively pursuing partnerships to develop its electric vehicle (EV) technology. A notable example is its joint venture with Rivian, named "Rivian and VW Group Technology", which aims to develop electrical/electronic architecture and software for vehicles.

SAIC Volkswagen is also converting many of its sites to produce electric vehicles. However, the company has sold sites in Urumqi, Turpan, and Anting as part of its strategic realignment.

Volkswagen Group has set ambitious goals for China, aiming to bring 40 new models to the market, with half of them being electrified. The company plans to offer more than 30 electric models in the China market by 2030.

Ralf Brandstätter, board member of Volkswagen AG for China, emphasises the importance of integrating into China's innovation ecosystem to secure the partnership's future. It is not clear if SAIC Volkswagen is utilizing the technology developed through Volkswagen's joint venture with Rivian.

The partnership between Volkswagen Group and SAIC Motor has been extended until 2040, with a 10-year extension to the original agreement. The joint venture will also focus on transforming SAIC Volkswagen's production network, prioritizing cost-effectiveness and productivity as EV demand and competition grow.

SAIC Volkswagen intends to introduce two electric vehicles as early as 2026, using a new, locally developed Compact Main Platform that utilizes zonal electric architecture for the first time in Volkswagen Group history.

Recently, a Volkswagen vehicle was retrofitted to run on Rivian's zonal design, according to a press release. However, it remains unclear who Volkswagen Group collaborates with specifically for developing the zonal electronic architecture for its new electromobility, aside from SAIC Volkswagen.

Despite these efforts, Volkswagen Group has faced declining profits in China, its largest single market. The company delivered 10% fewer vehicles in the first three quarters of 2024 compared to the previous year, according to its interim financial report.