Wu Borei, CTO of Volkswagen Group China: We're Working at "Chinese Speed" | Exclusive Interview by 36Kr

The intelligent transformation of joint-venture automakers in the Chinese market has become a major highlight of this year's Shanghai Auto Show. This is especially true for German automakers, which rely heavily on the Chinese market and often have a market share of over 30%.

Volkswagen is obviously one of the most proactive multinational automakers. At the auto show, Thomas Ulbrich, CTO of Volkswagen Group China, and Han Sanchu, CEO of CARIAD China, Volkswagen's intelligent software company, were interviewed by media outlets including 36Kr. They further elaborated on Volkswagen's intelligent strategy in China, as well as the role positioning and division of labor with its partners.

Thomas Ulbrich clearly told 36Kr that Volkswagen Group's previous joint-venture model in China has become difficult to adapt to the development rhythm of the Chinese market.

"Previously, the cooperation was only carried out between the German side and the two joint-venture enterprises (SAIC Volkswagen and FAW-Volkswagen). This cooperation model cannot meet the current actual needs of the Chinese market," said Thomas Ulbrich.

Left: Han Sanchu; Second from left: Thomas Ulbrich

Therefore, Volkswagen Group established an independent technology company, VCTC, in Anhui, which is commonly referred to as moving the headquarters from Wolfsburg 7,000 kilometers eastward.

Thomas Ulbrich said that with the establishment of VCTC, all the technical authority and responsibilities previously held by the headquarters in Wolfsburg, Germany, will be transferred to China. This means that in the future, joint-venture enterprises such as SAIC Volkswagen and FAW-Volkswagen only need to communicate with VCTC in terms of technical cooperation, and VCTC will become their sole technical cooperation interface.

In simple terms, VCTC is a R & D entity independent of the Wolfsburg headquarters in Germany, with the ability to make technical decisions and conduct verifications.

It is in the same time zone as the Chinese team, fully in line with the domestic work rhythm, and promotes various tasks at "Chinese speed". In addition, from the thinking mode, communication style to the working language, VCTC adopts the Chinese system to serve the needs of the Chinese market more efficiently.

These arrangements are derived from Volkswagen's top-level strategic design of "in China, for China".

Since the beginning of this year, under the tariff storm initiated by the new US government, the global automotive industry chain has faced more uncertainties. Thomas Ulbrich said that Volkswagen Group's strategy of "in China, for China" is forward-looking. "This strategy is like an umbrella, protecting our subsequent business in the Chinese market from the impact of current trade disputes and ensuring the stable and continuous operation of our business."

In addition to setting up the "Eastern Wolfsburg" in Anhui, Volkswagen has also reached strategic cooperation bound by capital with XPeng Motors and Horizon Robotics, an autonomous driving solution company, in China.

In 2022, Volkswagen Group invested 2.4 billion euros in Horizon Robotics and established a joint-venture company, CARIZON, for intelligent assisted driving.

In 2023, Volkswagen invested 700 million US dollars in XPeng Motors. The CEA electronic and electrical architecture jointly developed by the two parties will be installed in all Volkswagen's electric vehicles in China. At the same time, two jointly developed models will also be launched in the market in 2026.

The intelligent assisted driving solutions jointly developed by Volkswagen and Horizon Robotics are also gradually being installed in vehicles.

Intelligent assisted driving technology companies have blossomed everywhere in the Chinese market. Companies such as Huawei, Horizon Robotics, Momenta, DJI Auto, as well as younger companies like DeepRoute.ai and QCraft, all have the ability to deliver urban assisted driving systems.

In other words, in terms of industrial supply, intelligent assisted driving technology is no longer a scarce resource. Open cooperation has become the normal choice for both independent and joint-venture automotive companies. For example, SAIC, Chery, BYD, Geely, Great Wall, and even SAIC Volkswagen itself, have all cooperated with several intelligent assisted driving companies at the same time.

Volkswagen's capital tie - up with companies like Horizon Robotics has naturally attracted attention.

When talking about the cooperation with Horizon Robotics, Han Sanchu, CEO of CARIAD China, said that the relationship between Volkswagen and CARIZON is not a traditional client - supplier relationship. "CARIZON is not simply a supplier, but an ADAS One Team capability center jointly built by us."

Among them, Horizon Robotics' core engineers focus on the in - depth development of software, architecture, and algorithms, while Volkswagen's engineers are mainly responsible for the rapid integration of peripheral architectures and interfaces. This co - research model breaks through the common "black - box" problem in the cooperation between traditional Tier 1 and Tier 2 suppliers, achieving more efficient and transparent collaborative development.

Secondly, as part of Volkswagen China's technology R & D system, CARIZON's technical route is highly integrated with the CEA electronic and electrical architecture.

"Because of this, we can quickly implement advanced driving assistance functions at the L2+ and L2++ levels in vehicles and pave the way for achieving L3 by the end of 2027. The overall development path is also highly consistent with CEA."

However, although Volkswagen Group is firmly implementing its intelligent strategy in the Chinese market, the paces of different brands are not yet consistent. Currently, the CEA architecture and intelligent assisted driving technology deployed by Volkswagen China are not shared with the high - end brand Porsche.

Thomas Ulbrich said that the current CEA architecture is an electronic and electrical platform customized for the Chinese market, while Porsche models, as imported European cars, are designed and manufactured according to European architecture standards. Therefore, in terms of technical adaptation, it is impossible to integrate the CEA architecture with Porsche products in a short period of time. Whether to adopt relevant solutions in the future still needs to be comprehensively considered in combination with the group's overall strategy, technological progress, and product rhythm.

The following is a slightly edited transcript of the dialogue between 36Kr and Mr. Thomas Ulbrich and Mr. Han Sanchu:

1. In the era of intelligent electric vehicles, the Chinese parties of joint - venture companies such as SAIC Volkswagen have complete reserves in terms of intelligence, electrification, business architecture, and hybrid technology. Against this background, what is the current and future business relationship between VCTC and the two joint - venture companies, SAIC Volkswagen and FAW - Volkswagen? How will all parties divide the work in future business cooperation such as technology layout?

Thomas Ulbrich: Looking back, the previous cooperation was only carried out between the German side and the two joint - venture enterprises (SAIC Volkswagen and FAW - Volkswagen), and it was really difficult. This cooperation model cannot meet the current actual needs of the Chinese market.

Therefore, with the establishment of VCTC, all the technical authority and responsibilities previously held by the headquarters in Wolfsburg, Germany, will be transferred to China. This means that in the future, joint - venture enterprises such as SAIC Volkswagen and FAW - Volkswagen only need to communicate with VCTC in terms of technical cooperation, and VCTC will become their sole technical cooperation interface.

In simple terms, VCTC is a R & D entity independent of the Wolfsburg headquarters in Germany, with the ability to make technical decisions and conduct verifications.

It is in the same time zone as the Chinese team, fully in line with the domestic work rhythm, and promotes various tasks at "Chinese speed". In addition, from the thinking mode, communication style to the working language, VCTC adopts the Chinese system to serve the needs of the Chinese market more efficiently.

It is worth emphasizing that VCTC also has a key task: to ensure that every model of Volkswagen Group inherits the most core genes of reliability and safety of the Volkswagen brand. Through this cooperation model, VCTC deeply integrates the "Volkswagen genes" with the technical solutions customized for the Chinese market, achieving an effective interaction between tradition and innovation. This is precisely the core role that VCTC plays in Volkswagen's business in China.

2. As a senior manager of Volkswagen Group, how do you view the impact of the current escalation of global tariff barriers on the automotive industry? Does it mean that the automotive industry will gradually bid farewell to the global cooperation model and turn to a regional production layout?

Thomas Ulbrich: Volkswagen Group has always adhered to the core concept: we call for the construction of a stable and open trade system based on consensus, promote free discussions, and promote the healthy development of global trade.

From this perspective, our strategy of "in China, for China" is highly forward - looking. This strategy is like an umbrella, protecting our subsequent business in the Chinese market from the impact of current trade disputes and ensuring the stable and continuous operation of our business.

3. CARIAD and Horizon Robotics have established a joint - venture company, CARIZON. What is the current level of participation of the group and CARIAD in it? For users, is this ADAS solution a "black box" or a "white box"? Can problems be quickly responded to and solved?

Han Sanchu: First of all, Volkswagen Group has long regarded ADAS as one of the core technological capabilities at the strategic level, especially in the Chinese market, where the penetration rate of this capability is extremely high. It is not only driven by the market but also highly dependent on technological innovation. In order to build relevant capabilities more quickly and overcome the challenge of Volkswagen's relatively complex traditional processes, we decided to establish a joint - venture company, CARIZON, with Horizon Robotics. This is an important measure for the group to promote the construction of ADAS capabilities in China.

Secondly, we have reached a high - level consensus within the company on the cooperation method. The relationship between us and CARIZON is not a traditional client - supplier relationship. CARIZON is not simply a supplier, but an ADAS One Team capability center jointly built by us. Among them, Horizon Robotics' core engineers focus on the in - depth development of software, architecture, and algorithms, while Volkswagen's engineers are mainly responsible for the rapid integration of peripheral architectures and interfaces. This co - research model breaks through the common "black - box" problem in the cooperation between traditional Tier 1 and Tier 2 suppliers, achieving more efficient and transparent collaborative development.

Thirdly, as part of Volkswagen China's technology R & D system, CARIZON's technical route is highly integrated with the CEA electronic and electrical architecture. Because of this, we can quickly implement advanced driving assistance functions at the L2+ and L2++ levels in vehicles and pave the way for achieving L3 by the end of 2027. The overall development path is also highly consistent with CEA.

Based on these three aspects, through our layout and efficient cooperation in the ADAS field, we can provide Chinese users with an ADAS solution that can be iterated efficiently, safely, and reliably.

3. Currently, we see that joint - venture automakers tend to use DJI or Huawei, and have achieved mass production. In the future, does our self - developed ADAS system need to go through a similar bidding process to compete for cooperation opportunities?

Thomas Ulbrich: Our strategic positioning is very clear: Horizon Robotics is the core partner and will be the strategic entity for the group to develop ADAS systems in the Chinese market.

4. In the future, will Porsche's intelligent design rely on the R & D progress of CARIAD China? Is there a possibility of further optimization of intelligent driving functions?

Thomas Ulbrich: The current CEA architecture is an electronic and electrical platform customized for the Chinese market, while Porsche models, as imported European cars, are designed and manufactured according to European architecture standards. Therefore, in terms of technical adaptation, it is impossible to integrate the CEA architecture with Porsche products in a short period of time. Whether to adopt relevant solutions in the future still needs to be comprehensively considered in combination with the group's overall strategy, technological progress, and product rhythm.