VW to follow Audi with Chinese platform JV

VOLKSWAGEN is reportedly in discussions with Chinese electric vehicle start-up Zhejiang Leapmotor Technology (ZLT) about the possibility of a cooperation for VW’s Jetta brand.

The technology-based collaboration follows the announcement last month that Audi is looking to share platform technology with Chinese manufacturer IM Motors as uncertainty surrounding the financial state of the Volkswagen Group builds.

The possibility of a joint venture between Volkswagen and state-owned Chinese FAW Group could result in the purchase of “a platform of technologies” from ZLT, according to state-backed financial news outlet, Cailianshe.

According to a report published by Reuters this week, both Volkswagen and ZLT declined to comment on the article. However, the timing of the Chinese report is somewhat interesting.

Earlier this week, ZLT unveiled a new Four Leaf Clover platform developed in-house for battery electric vehicles.

Zhejiang Leapmotor Technology CEO, Zhu Jiangming, said ZLT is actively looking to license the architecture with other manufacturers, and said he is “in advanced talks with two foreign companies about such a partnership”.

Mr Jiangming said at least one of those parties is a “new player in the electric vehicle segment”, which could produce Leapmotor-developed models in overseas markets.

The Four Leaf Clover architecture features integrated computing platform ZLT says is capable of controlling “all intelligent functions … including autonomous driving and smart cockpit functions”.

The architecture is reported to have achieved significant production cost savings by reducing the use of control modules and wiring harnesses, reducing per-unit material costs by the equivalent of $A100.

The next-generation platform is slated to enter production from 2025.

Mr Jiangming is a former electronics engineer who co-founded the giant surveillance firm Dahua. He launched Leapmotor in 2015 with the backing of investors that include state-owned Shanghai Electric Group and Hongshan, formerly Sequoia Capital China.

Leapmotor employs more than 2000 engineers and has sold 44,500 vehicles in the first half of 2023.

It is further reported that Volkswagen will collaborate with China’s Xpeng to jointly develop models built on its G9 Edward platform.

According to a report in Automotive News Europe (ANE), Xpeng will receive so-called “technology service revenue” from Volkswagen from next year onwards, overturning a four-decade old model of foreign manufacturers charging Chinese partners for technology licensing.

“We will use the G9 platform and combine it with Volkswagen technology. We want to tap into white spots on our product portfolio,” said Volkswagen Group CEO, Oliver Blume.

ANE says the partnership could help lower Xpeng’s EV production costs by leveraging Volkswagen’s scale and bargaining power from the supply side.

While some analysts view the news as a defeat for Volkswagen in its attempt to conquer the Chinese EV market, others have labelled it a quick and capital-efficient way to fill the gap in its middle-class EV segment in China.