Volkswagen weighs Chinese software for European volume EVs

Daniel Okafor

Volkswagen’s Core brand group—Volkswagen, Škoda and Cupra—must improve financial results by about €12 billion by 2030 while cutting nearly €15 billion from planned investment. That scale turns an internal software argument into a board-level cost case.

What could Volkswagen move to Europe?

Brand chief Thomas Schäfer and China board member Ralf Brandstätter have proposed “using the CEA electronic architecture” in future European vehicles, including the ID.Golf, ID.Passat and Škoda Enyaq.

Manager Magazin, citing insiders, said the proposal focuses on high-volume segments on the new SSP platform. The range runs from vehicles the size of an ID. Polo to those the size of a Tiguan. Estimates put the scope at three-quarters of all future electric vehicles in the group.

The architecture comes from Volkswagen China Technology Company in Hefei, where the Chinese-market system was developed with Xpeng. That would make Hefei and Xpeng more consequential to Volkswagen’s European vehicle programs.

Takeaway: CEA could reach far beyond a niche electric model and become a standard layer across Volkswagen’s volume brands.

What does the cost gap look like?

Volkswagen China Technology Company CEO Thomas Ulbrich implemented the Xpeng partnership and made CEA production-ready for the group, giving Schäfer an internal advocate. China already deploys CEA in the ID. Aura and ID. Era. European software platforms at Audi and Porsche have repeatedly slipped.

Manager Magazin reports that the planned Rivian architecture costs substantially more. Its figures put one developer hour at the Californian Rivian joint venture, RVT, at about €174. The comparable rate is about €60 in China and €120 in Germany.

• Rivian joint venture RVT: about €174 per developer hour
• China: about €60 per developer hour
• Germany: about €120 per developer hour

Advocates argue that an electric version of the upcoming new Tiguan would cost roughly €8,000 more with Rivian software. They estimate that moving volume models to CEA could save between €4 billion and €5 billion.

Those figures have not yet faced European production at scale; the proposed vehicles remain future programs. Because Volkswagen has not approved the switch, the €4-5 billion remains a potential saving rather than a booked benefit.

Takeaway: The reported cost gap is large enough to matter, but the savings still depend on what Volkswagen keeps paying elsewhere.

Does Leapmotor add competitive pressure?

Opel CEO Florian Hüttl has announced a fully electric C-segment SUV for 2028 using the Leapmotor B10 electric architecture. That places a lower-cost Chinese-developed platform on a dated European product calendar.

Within Volkswagen Group, some concern centers on Stellantis. After the first Opel project, the fear is that Stellantis could move its volume brands wholesale toward more cost-effective Leapmotor technology. No such group-wide switch has been announced.

Takeaway: Opel has placed Leapmotor architecture on the 2028 calendar, while Volkswagen has only floated a proposal.

Why does the Rivian route face resistance?

Audi CEO Gernot Döllner helped build Volkswagen’s alliance with Rivian, and Audi relies on the US software outside China. If Volkswagen’s volume brands move to CEA, Rivian would lose significant production volumes. Brands still using Rivian software, including Audi and Porsche, could then carry higher fixed costs per vehicle.

Schäfer’s strategists estimate that “the core brand group would still save a net three billion euros” even if it continued to co-finance the Rivian joint venture. That is the central financial counterweight to Rivian’s loss of scale.

Europe adds a separate engineering bill. Engineers must adapt Chinese software to European cybersecurity and approval standards, requiring additional development work and money. Political barriers also make Chinese software unlikely to gain traction in the US.

There is a labor consequence, too. If development activities shift systematically to Hefei, European software jobs face greater pressure.

Takeaway: Rivian protects existing scale and European engineering, while CEA offers the lower quoted cost.

Who makes the call?

Volkswagen AG’s Executive Board, led by group CEO Oliver Blume, will make the final decision. CFO Arno Antlitz is expected to carry particular weight because the Core group must deliver the financial improvement and investment reduction.

The first checkpoint is whether the board approves European development with CEA and sets a deployment timetable for the affected SSP vehicles. The 2028 Opel launch will provide an external cost comparison. Until Volkswagen votes, this remains software arithmetic, not a production decision.