Different needs, different rules: Developing in China, for China

With the ID.UNYX 07, production has begun on the first Volkswagen Group model featuring the China Electronic Architecture (CEA), the Group’s first centralized electronic architecture. Remarkably, the architecture was developed in just 18 months through a joint effort by Volkswagen Group China Technology Company (VCTC), CARIAD China, and XPENG at the development center in Hefei.

But why did the company decide on the “In China, For China” strategy in the first place — a strategy that also laid the foundation for developing the CEA?

China is a growth market that, with over 1.4 billion people and a comparatively low vehicle saturation of around 250 vehicles per 1,000 inhabitants (for comparison, in Germany it is 590 vehicles), offers tremendous potential. But the market fundamentally differs from Europe in terms of user behavior and regulations.

Users are different – as are their expectations

The average buyer of an electric vehicle in China is 35 years old — often a digital native who places great value on in-car experience, smart cockpits, AI functions, voice control, driver assistance systems, and high-tech features across the board. By contrast, the European counterpart is 56 years old and values durability and driving dynamics. This difference is also due to the dense traffic in Chinese megacities, which imposes different demands on vehicles and their (assistance) systems than, for example, German highways, where vehicles typically travel at higher speed.

The regulations and standards by which cars are assessed and approved in Europe and China differ fundamentally in many areas. This includes emissions, safety, and data protection. Software compliance standards differ significantly between the Chinese GB/T standards and the European UNECE/EU regulations.

Tailored development with global synergies

All of this contributes to the fact that a unified global development approach for vehicles and their software is hardly feasible — nor is it effective. Volkswagen therefore conceives vehicles for different markets from the ground up and uses synergies wherever possible.

In China, the Group has brought a strong partner on board in the form of XPENG, benefiting from background IP, market experience, and the exchange of ideas. But one thing remains clear: Volkswagen owns and controls every single line of code through VCTC and CARIAD China, which operate together as a powerful “One Team” in Hefei.

20+ New Energy Vehicles with CARIAD software

The strategy is paying off: In 2026, the Group will enter the competition in the local market for electrified New Energy Vehicles (NEVs) stronger than ever, bringing more than 20 fully electric, plug-in hybrid, and range-extended models to the Chinese market.