Volkswagen is setting new standards: electric cars will be made entirely in China in the future!

Volkswagen is setting new standards: electric cars will be made entirely in China in the future!

Volkswagen has taken a significant step in the automotive industry: the new technology and innovation center was opened in Hefei, China, which enables the full development and production of new electric vehicles in China. In this way, Volkswagen is fulfilling its strategy of positioning itself as an important player in the world's most competitive automobile market.

This was announced on December 24, 2025, after the final stage of the center's expansion was successfully completed. VW boss Oliver Blume emphasized that the company wants to become the global technology driver in the automotive industry and at the same time consolidate its presence in the Chinese market. A central aspect of this project is the development of new models that can be finalized outside of Germany for the first time. All necessary approvals for the vehicles to be ready for market can be processed directly in Hefei.

China's car market is changing

A look at developments in the Chinese car market shows how attractive it is for manufacturers. In the first quarter of 2025, the automotive market grew by 6 percent, while the share of electric vehicles (NEV) increased an impressive 36.4 percent. This development has meant that local manufacturers, led by BYD, now control almost 60 percent of the market, while Volkswagen, in comparison, has a market share of 12.1 percent, just ahead of Geely (12.0 percent) and heavily influenced by the increasing sales figures of local competitors.

Volkswagen is aware of the challenges that this change brings with it. The market share of traditional combustion vehicles continues to decline, highlighting the need to focus more on electric vehicles. The development center in Hefei will be particularly helpful in this regard, as it is expected to shorten the development time for new models by 30 percent, which will enable the group to respond more quickly to local needs. It will also provide new platforms for electric cars, which will serve as a basis for vehicles in the price range of around 20,000 euros.

The competition is getting tougher

With the rapidly increasing market share of incoming NEV products, the pressure on German manufacturers is increasing. As can be seen in the current market report, Volkswagen, BMW and Mercedes, for example, only have small shares in the NEV segment, which puts additional pressure on the manufacturers' strategies. Volkswagen's market share in this area is only 2 percent, which is significantly behind BYD's 13.6 percent.

The numbers are alarming: The share of electric vehicles in new registrations rose from 14.8 percent in 2021 to 51 percent in March 2025, suggesting that a wave of consolidation in the industry is imminent. Automakers that fail to adapt in time could find themselves in trouble in the coming years.

Volkswagen therefore faces the challenge of developing innovative products quickly and efficiently. The new center in Hefei will play a special role in how the long-running automobile can survive in China's highly competitive landscape. The path is clear: the future belongs to electric vehicles, and VW is determined to take part in this development.