VW’s China reboot off to a slow start
Volkswagen's restart in China utilising technology from its local partner Xpeng is reportedly off to a very rocky start. According to a news agency report, VW sold less than 10 percent of its targeted volume for the first jointly developed model, the VW ID.UNYX 08. Additionally, VW is said to have once sought an alliance with BYD or Leapmotor.
VW ID. UNYX 08
Image: VW
As early as July 2023, VW and Xpeng entered into a collaboration, which also included an investment by the Wolfsburg-based company in the Chinese automaker of around 5 per cent. In April of this year, Volkswagen then launched its first model based on Xpeng technology onto the Chinese market: the all-electric SUV VW ID. UNYX 08, which uses Xpeng’s Edward platform, along with cockpit systems, smart driving technologies, and AI chips. In September, the technically related all-electric sedan VW ID. UNYX 09 followed. Soon, the first VW electric vehicles in China based on the newly developed China Electronic Architecture (CEA), co-developed with Xpeng, are also expected to arrive.
However, a report by news agency _Reuters_ now reveals that the VW ID. UNYX 08, launched as a beacon of hope for a fresh start in China, has so far turned out to be a damp squib. According to data from consulting firm _ThinkerCar_, the VW ID. UNYX 08 sold an average of 267 units per month between April and August. Volkswagen had reportedly originally planned to sell 3,622 units per month for this year. In other words: in the first five months since its market launch, the electric SUV fell short of its target by a staggering 92.6 per cent, achieving just 7.4 per cent of the planned sales.
According to insiders interviewed by _Reuters_, one cause of weak sales is the patchy distribution network. The car is reportedly not well-known because the VW ID. UNYX 08 is primarily sold through a new dealer network operated by Volkswagen Anhui, rather than the more than 3,000 dealers that VW operates with its partners FAW and SAIC. According to Volkswagen, the Anhui dealer network currently has only 166 outlets. In the future, the car will also be offered through more sales points in partnership with long-term partner FAW.
ID. UNYX 08 recently offered with a 17 per cent discount
Further issues with the model apparently lie in its equipment and pricing. At its launch in April, the VW ID. UNYX 08 was offered at prices starting from 229,900 yuan, equivalent to less than €29,000 euros. However, this was apparently not competitive, as VW has been offering the model with a 17 per cent discount for weeks, according to _Reuters_.
Chinese competitors in the same price range, on the other hand, offer significantly more advanced equipment: the Xiaomi YU7, for example, features a highly developed sensor package, while the Zeekr 7X offers significantly better fast-charging capabilities. According to _ThinkerCar_, Xiaomi sold nearly 57,000 units of the YU7 between April and August, while Zeekr sold more than 21,000 units of the 7X – compared to around 1,300 units of the VW ID. UNYX 08. “Chinese customers ask: Why buy an expensive German car if they can get the technology much cheaper?” said Pedro Pacheco, Vice President of Research at Gartner.
VW considered partnerships with BYD and Leapmotor
In addition to focusing on the VW ID. UNYX 08, the _Reuters_ report also sheds light on Volkswagen’s broader China strategy, revealing previously unknown details. According to the report, before entering into the partnership with Xpeng in 2023, VW had already attempted in 2022 to establish a cooperation with China’s largest EV manufacturer, BYD, to use its Dolphin platform for vehicles under VW’s Chinese sub-brand Jetta. _Reuters_ was unable to determine why the deal ultimately failed. Additionally, before the Xpeng deal, VW had also negotiated with Chinese manufacturer Leapmotor, which ultimately chose a partnership with Stellantis.
Volkswagen’s business in China has plummeted in recent years. In the first half of 2026 alone, sales in China dropped by 25.9 per cent to 973,000 vehicles across all drivetrains. For electric vehicles, which are particularly important in China, sales even fell by 47.9 per cent to 30,900 units. As a countermeasure, VW has just implemented updates and drastic price cuts for its older electric models, the ID. UNYX 06 and 07, which are not yet based on Xpeng platforms, according to reports.