Quick look
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Volkswagen can now speed up product development time and also cut development costs with a technological breakthrough in the form of China Electronic Architecture (CEA).
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By centralizing electronics into one scalable platform, VW can now deploy advanced AI and OTA updates across its entire Chinese line-up.
It’s clear that the Chinese automotive manufacturers are way ahead of the older automakers (mostly western as well as the Japan) in EVs. And now, as the world is transitioning towards electric mobility as a way to fight climate change, the Chinese EVs being exported in big numbers are showing themselves to be more advanced and produced at lower cost.
Why Chinese automakers lead
The Chinese had started earlier partly because the government gave direction to the industry and provided the necessary support which also extended to consumers. So the transition to EVs was a national effort in the largest car market in the world. For the established automakers, it has been tough to catch up with the Chinese rivals, let alone match them technologically. Even Ford’s CEO acknowledges that the Chinese are way ahead in EV technology.
In the past when the Japanese began to sweep across the world and displace the European and American brands, there came a time when it made sense to join forces rather than just compete head-on. For example, Ford teamed up with Mazda in the late 1970s and the partnership helped Ford remain competitive in Asia for a few decades.
In this EV era, some western automakers have started to also team up with Chinese automakers, especially in China. They realise that the products they can develop with their own resources are not competitive or appealing enough to buyers in China, so the next best thing is to share technology from others.
Volkswagen Group China is one of the companies that made such a move and in partnership with XPENG and CARIAD China, a technological breakthrough in the form of China Electronic Architecture (CEA) has been developed in just 18 months. CEA will shift Volkswagen’s vehicle line-up toward a software-first approach.
CEA acts as a centralized ‘digital brain’ for the vehicle, a departure from the old method of using dozens of individual computers. Instead, it uses 3 high-performance central computers to manage the car’s functions.
Full entry into Software-Defined Vehicles
The VW ID. UNYX 07 is the first model to feature this architecture, and its production at the Volkswagen plant in Anhui marks the company’s full entry into Software-Defined Vehicle production. By streamlining the electronics, Volkswagen has reduced the number of control units by 30%, which significantly lowers costs and simplifies the car’s internal complexity. This leaner design creates a more stable foundation for advanced AI in the cockpit and localized driver assistance systems.
CEA across the whole range
One of the most unique aspects of CEA is its versatility. While many advanced electronic systems are reserved for high-end electric cars, Volkswagen is deploying the CEA across its entire range, including electric, hybrid, and traditional ICE vehicles. This allows the company to offer full-vehicle over-the-air (OTA) updates to almost any customer anywhere in China, ensuring that cars can gain new features and improvements long after they are sold.
The ‘In China, for China’ strategy adopted by the German automaker has also significantly improved development efficiency. By integrating suppliers early and developing the tech locally, Volkswagen has cut its overall vehicle development cycles by 30% and reduced costs for specific projects by up to 50%. This speed allows the brand to react quickly to the fast-moving Chinese market which is also highly competitive.
Looking ahead, Volkswagen plans to expand the CEA application rapidly. By the end of 2026, 4 additional models from its various joint ventures will be launched with this architecture. This roll-out will eventually cover everything from compact cars to large family vehicles.
Volkswagen and XPENG accelerate E/E Architecture technical collaboration
