VW to involve Chinese suppliers in global EV sourcing

For the first time, the world's second largest carmaker Volkswagen Group is to involve Chinese technology companies in its global sourcing to tap into their expertise in areas including digitalization and electrification.

Michael Baecker, executive vice-president of Volkswagen Group China responsible for purchasing, said: "China's automobile industry has developed rapidly in the past few years, especially in electronics and cutting-edge technologies."

"By shifting our sourcing strategy towards China, we can utilize the country's best innovations to accelerate our electrification transformation," he said.

Around 20 Chinese suppliers were briefed about the bid to provide hardware for electric models to be rolled out in Europe and North America in 2025, said Volkswagen Group China in a recent statement. It did not offer the companies' names.

Those models will be built on a unified, scalable software platform that Volkswagen is developing for all of its brands cars including the namesake Volkswagen, Audi and Porsche.

Volkswagen said the bid will focus on four key areas: connectivity, intelligent cockpits, autonomous driving and shared mobility.

To win the bid, the suppliers are required to have innovative and flexible technical solutions for complex sourcing needs, among other things, said Volkswagen. It said their technical concepts will be evaluated by the group's engineers in Europe.

The carmaker also requires suppliers to support the group's target of achieving carbon neutrality by 2050. Volkswagen has been working together with its suppliers to achieve complete renewable electricity usage by 2030.

The suppliers qualified to meet both business and sustainability requirements will have their concepts applied to the models to be rolled out in Europe and North America in 2025, said Volkswagen.

With the launch of a strategy called New Auto last July, Volkswagen has been rolling out a comprehensive and robust plan to enable the scaling up of future technologies, from mechatronics, software and mobility solutions to batteries and charging.

"Volkswagen Group is now welcoming high-competence Chinese suppliers to jointly develop exciting future opportunities and help it build global leadership in the New Auto world," said the carmaker.

China has been the world's largest market for electric cars and plug-in hybrids since 2015. Last year, over 3.5 million electric cars and plug-in hybrids were sold in the country, with most of them from local Chinese carmakers.

Volkswagen sold 93,000 electric cars in China last year, four times the number in 2020. It expects to at least double the deliveries this year.

The Chinese Association of Automobile Manufacturers expect carmakers' total deliveries of electric cars and plug-in hybrids to hit 5.5 million in 2022.