Volkswagen aims to reduce the cost of developing electric vehicles (EV) in China by up to 50% following the full commissioning of its new test centre in Hefei.
In a statement, the German group said the development brings “end-to-end development capabilities directly to the Chinese market”.
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The facility, part of Volkswagen Group China Technology Company (VCTC), brings together software–hardware testing, battery and powertrain validation, and complete vehicle platform verification at a single site.
Volkswagen Group China chairman and CEO Ralf Brandstätter said: “By expanding our footprint in Hefei, we are strengthening our ability to respond quickly to local needs and to shape technologies directly where they will be used.
“This step deepens our commitment to China and ensures that our future products reflect the preferences and expectations of Chinese customers from the very beginning.”
The company said this consolidation is enabling both the projected cost reduction and shorter development cycles.
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By GlobalDataAccording to Volkswagen, development times can be shortened by about 30%.
This is linked to the introduction of the China Electronic Architecture (CEA), the group’s first zonal electrical/electronic architecture designed specifically for the Chinese market.
CEA is being delivered jointly by VCTC and CARIAD China in Hefei within an 18‑month timeframe.
“Leveraging local development and early supplier integration during the concept phase of new cars and technologies, the cost of a new model can be reduced by up to 50% in specific key projects,” the statement read.
The Hefei site is now described by the group as its largest development centre outside Germany and, with the completion of new test workshops, its most wide‑ranging research and development hub beyond its home market.
The complex covers roughly 100,000m² and houses more than 100 laboratories.
The range of testing includes battery performance, powertrain systems and digital cockpit functions, with the set‑up allowing these to be carried out in parallel.
Volkswagen Group China chief technology officer and VCTC CEO Thomas Ulbrich said: “The new workshops give our engineering teams an entirely new level of integration. We can now run software, hardware, and full-vehicle validation processes in parallel, shorten decision loops, and bring innovations to maturity much faster.
“This environment enables us to push forward next-generation intelligent-vehicle technologies with high precision and efficiency.”
In addition to serving the domestic market, the new workshops in Hefei are also being used to validate products and technologies destined for export to regions such as ASEAN and the Middle East.
Volkswagen plans further expansion of the site’s capabilities.
A Functions Integration Test (FIT) Laboratory is scheduled to begin operations in mid‑2026.
It will be one of only two such facilities within the group and will be used to simulate extreme environmental conditions for vehicle testing.
