Volkswagen has outlined a plan to strengthen its position in China with an all-new platform for affordable electric cars. The platform will be based on local components.

The news was shared on Friday by China chief Ralf Brandstaetter during the opening a new EV development and procurement center—Volkswagen Group China Technology Company (VCTC) in Hefei. An investment of around $1.1 billion in the VCTC is expected to create over 2,000 jobs.

According to Reuters, Volkswagen will develop a new entry-level, China-specific platform, currently known as the “A Main Platform.” The focus is on lowering costs, partially through using an even higher ratio of local components than in the case of the current production of the MEB-based models in China (ID.3, ID.4, ID.6, and ID.7).

The new platform will be derived from the Modular Electric Drive Toolkit (MEB) and is expected to be ready in 2026—about a third earlier than initially anticipated—thanks to the VCTC.

Ralf Brandstaetter explained that the Chinese electric vehicle market was very “price-sensitive”, which requires optimizing costs. Let’s recall that the Volkswagen brand is no longer the best-selling brand in China (BYD surpassed VW in late 2022), mostly because of decreasing gasoline car sales (EVs are a small part of the brand’s volume and grew slower than expected).

Price cuts of the Volkswagen ID.3 model in China already allowed VW to increase the sales volume from an average of 2,200 units per month to around 10,000 per month (in July-October).

The new platform targets the entry-level segment with a price range of $19,570 (140,000 CNY) and 170,000 CNY ($23,760). This would be quite interesting.

According to the report, the plan is to introduce four models based on the new platform and produce them through the existing joint ventures with SAIC and FAW, which are also producing the MEB-based models.

On top of that, starting in 2026, Volkswagen hopes to launch two additional all-electric models, developed in partnership with XPeng. In total, there would be six new models.

Before that, by 2026, Volkswagen is expected to launch 10 new all-electric cars globally, as well as increase the speed of launching new vehicles.