Volkswagen finally turns around.

“The practice of developing and manufacturing cars in Germany and then exporting them no longer works because the world has changed everywhere.” The statement by Oliver Blume, the CEO of Volkswagen, reveals the significant transformation that this international automotive giant is currently undergoing.

In the Chinese market, Volkswagen not only faces pressure from traditional fuel - powered vehicle competitors but also challenges from emerging new - energy vehicle stars. According to Blume, the fierce competition comes from “more than 150 competitors and strong innovation drive.”

In the era of fuel - powered vehicles, Volkswagen was the undisputed leader in the Chinese market, and the Chinese market also contributed to the rise of its international influence. However, the automotive market is changing. The popularization of new - energy vehicles has triggered a survival crisis for traditional fuel - powered vehicle manufacturers like Volkswagen. Under heavy pressure, Volkswagen has significantly accelerated its electrification transformation in the Chinese market, and multiple new - energy vehicle models will be launched this year.

In China, the world's largest automotive market, can Volkswagen successfully write its own transformation path?

01. Breaking the Promise to Enter the Range - Extended Market

On March 30, SAIC Volkswagen's ID. ERA 9X will officially start pre - sales. This vehicle offers a range - extended power form, marking Volkswagen's official entry into the range - extended vehicle market.

The range - extended technology has been controversial during the development of new - energy vehicles. For a long time, range - extended technology was regarded as a backward technology. Those who are not optimistic about range - extended technology believe that it not only has higher carbon emissions than pure - electric vehicles but also faces problems such as short pure - electric range, slow charging, obvious noise, and poor driving experience in a power - deficit state.

Volkswagen was once a clear opponent of range - extended technology. In 2020, Feng Sihan, then the CEO of Volkswagen Brand in China, said bluntly, “From the perspective of a single vehicle, range - extended electric vehicles have certain value, but from the perspective of the whole country and the earth, it's nonsense and the worst solution!” Wei Deman, then the head of Volkswagen Group's R & D department in China, also said that range - extended electric technology was outdated.

However, this so - called “backward” range - extended technology has given birth to two best - selling new - energy vehicle brands in China: Li Auto and Leapmotor. The Wenjie brand, one of the representatives of high - end self - owned brands, has also achieved a significant increase in sales through range - extended technology. Moreover, from the perspective of price - band distribution, range - extended vehicles have been widely recognized by consumers in both high - end and mass - market price bands.

Now, the rising popularity of range - extended vehicles has become a new industry consensus in the Chinese automotive market, and many automakers have joined the range - extended vehicle market to seek profits. Volkswagen, which is under great pressure in electrification transformation and sales, has finally “broken its promise” and joined the range - extended vehicle market.

“We chose the range - extended route because we see that the coexistence of multiple power forms such as pure - electric and hybrid in the Chinese market will continue,” said Jizekai, the CEO of Volkswagen Passenger Cars Brand in China.

Now, after many automakers have entered the market, the technological ceiling of range - extended vehicles is constantly being raised: not only is the range getting longer, but there is also competition in terms of fuel consumption in a power - deficit state, quietness, and a driving experience comparable to that of pure - electric vehicles.

Volkswagen's range - extended vehicles are also very competitive. “When we decided to develop range - extended vehicles, we told ourselves that we must do something different. We conducted a lot of user research and found that people had many complaints about range - extended vehicles in cold weather, high - altitude areas, and power - deficit states. The marketing department said that if we were going to do it, we had to effectively solve these complaints,” said Fu Qiang, the executive deputy general manager of SAIC Volkswagen's sales and marketing department and the general manager of Shanghai SAIC Volkswagen Automobile Sales Co., Ltd.

The ID. ERA 9X is equipped with SAIC Volkswagen's EA211 Golden Range - Extended System. This system is based on the Volkswagen EA211 engine with a production volume of over 20 million units and is paired with a 65.2 - kilowatt - hour large - capacity battery pack from CATL. The new vehicle has a CLTC pure - electric range of over 400 kilometers and a comprehensive range of over 1500 kilometers. The four - wheel - drive version has a fuel consumption of 6.27 liters per 100 kilometers in a power - deficit state.

Actual test data shows that SAIC Volkswagen's EA211 Golden Range - Extended System can accelerate from 0 to 100 km/h in 6.31 seconds in a power - deficit state (battery level below 20%) in Heihe at - 30°C, only 0.8 seconds slower than when fully charged; in Lhasa at an altitude of 3650 meters, the acceleration difference between a high - battery - level state and a power - deficit state is only 0.18 seconds; when the range - extender kicks in, the noise change in the rear row is less than 0.5 decibels.

Volkswagen has invested a lot of effort in the ID. ERA 9X. It is reported that this vehicle is not only planned to be sold in China but also considered for export in the future. During the testing, Volkswagen Group's global standards were used, and it completed two - winter and two - summer tests, a 100,000 - kilometer test, and a 300,000 - kilometer bench - simulation test.

In the automotive industry, “Series 9” models are often the brand's flagships, usually high - end models, which play a key role in leading technology and demonstrating innovation for automakers and are targeted at discerning high - end vehicle consumers. Volkswagen's range - extended technology is first installed on the “Series 9” ID. ERA 9X, which shows the brand's high expectations for it.

02. A More Open Present

Entering the range - extended vehicle market, which it once didn't favor, is just one manifestation of Volkswagen's accelerated electrification transformation.

Facing the Chinese market, Volkswagen is seeking a change method that suits local conditions. As early as three years ago, Volkswagen launched the “In China, for China” strategy.

One of the major manifestations of Volkswagen's transformation in China is that it has changed the traditional joint - venture model of “foreign parties providing technology and Chinese parties being responsible for the market” and started exploring the “Joint - venture 2.0” model, shifting from “technology introduction” to “technology co - creation.” In the view of DoNews, this means that in the “Joint - venture 2.0” model, the Chinese side's say has been strengthened.

Take the ID. ERA 9X as an example. While following Volkswagen's global engineering standards, this vehicle is defined by the Chinese team and deeply integrates local Chinese supply chains such as CATL's batteries and Momenta's intelligent driving technology.

“The ID. ERA 9X is the first product of SAIC Volkswagen's Joint - venture 2.0 strategy and our flagship product. At the same time, it is also a product that demonstrates China's local development and integration capabilities. It bears the mission of new - energy transformation and brand rejuvenation and is also a touchstone for testing the change in SAIC Volkswagen's marketing concept,” said Tao Hailong, the Party secretary and general manager of SAIC Volkswagen.

In addition, Volkswagen's scope of cooperation in China is also expanding. A representative event in this regard is the cooperation with XPeng Motors.

As early as July 2023, Volkswagen signed a framework agreement on strategic technical cooperation and minority equity investment with XPeng Motors, planning to jointly develop two Volkswagen - brand electric vehicles exclusive to the Chinese market.

The latest news shows that on March 26, the Yuzhong 08, jointly developed by Volkswagen and XPeng Motors, will officially start pre - sales. This vehicle is positioned as the “first full - time connected full - size pure - electric SUV” and is the first flagship product of the Golden - Badge Volkswagen family.

In terms of configuration, the Yuzhong 08 is standard - equipped with XPeng Motors' VLA full - scenario intelligent driving assistance system across all models, with the highest intelligent driving computing power of 1500 TOPs in its class, enabling enhanced L2 - level driving assistance; in terms of the intelligent cockpit, it is the first Volkswagen - brand model to be equipped with the Qualcomm Snapdragon 8295P cockpit chip across all models; it is also the first Volkswagen - brand pure - electric vehicle globally built on an 800 - volt high - voltage SiC platform and is standard - equipped with exclusive batteries from CATL across all models, with a maximum CLTC range of 730 kilometers.

“The Yuzhong 08 is a strong proof of the ‘In China, for China’ strategy. This model is truly developed in China and for China, deeply integrating Germany's exquisite engineering technology and China's local cutting - edge innovation, and will be quickly launched into the market with a highly competitive price. Models represented by the Yuzhong 08 are an important step for the group to firmly move towards the goal of being a ‘global leader in automotive technology’,” said Oliver Blume, the chairman of the Volkswagen Group's Management Board.

It is reported that in addition to the Yuzhong 08, the Yuzhong 06 and Yuzhong 07, as well as another model jointly developed by Volkswagen and XPeng, will be launched in the second quarter and before the end of the year respectively.

According to Jizekai, Volkswagen will launch 13 new new - energy vehicle models in China in 2026. At the Volkswagen Group level, more than 20 electrified vehicle models will be launched this year.

03. Behind the Transformation

In today's Chinese automotive market, on the consumer side, the penetration rate of new - energy vehicles has exceeded 50%, and consumers' awareness and acceptance of new - energy vehicles are constantly increasing. On the supply side, after years of development, China has established a complete industrial chain and leading technological advantages in the field of new - energy vehicles. Chinese enterprises lead the world in the core three - electric and intelligent technologies of new - energy vehicles.

These have strongly impacted Volkswagen's dominant position in the era of fuel - powered vehicles. Although Volkswagen has long been promoting electrification reform, it has not been able to replicate its success in the fuel - powered vehicle market due to various internal and external factors.

Now, Volkswagen's series of “compromises” and transformations in the field of new - energy vehicles mean that this once - dominant player in the era of fuel - powered vehicles is quickly and flexibly adapting to the changes in the Chinese market, accelerating to make up for its shortcomings in new - energy vehicles, and trying to regain the voice in the automotive market from the diverse Chinese new - energy vehicle brands.

In the view of DoNews, Volkswagen's strong strategic determination and unprecedented open attitude in developing the Chinese market and accelerating electrification reform mean that Volkswagen has truly “turned around”: from being in a seller's market in the era of fuel - powered vehicles to a buyer's market in the era of new - energy vehicles, with user needs becoming the dominant factor in its decision - making.

Volkswagen's entry into the market with its advantages in supply - chain scale, excellent cost - control ability, strong brand influence, and user base may further intensify the competition in the Chinese new - energy vehicle market. However, at the same time, Volkswagen also faces direct competition from many excellent Chinese new - energy vehicle brands. How to consolidate the quality and reputation of German - made vehicles, stand out in the fierce competition, and stabilize its industry position will be a major test for Volkswagen in the future.

This article is from the WeChat official account “DoNews” (ID: ilovedonews), written by Xu Yun and edited by Yang Bocheng, and is published by 36Kr with authorization.