Volkswagen is stepping up exports of electric vehicles built in China to emerging markets as it seeks to make use of lower manufacturing costs and locally developed technology.
The move, reported by the Financial Times (FT), comes as China’s car market faces softer demand, leaving the industry with excess capacity and sharper price competition while domestic carmakers increase their overseas presence.
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For Volkswagen, the export plan is part of a broader effort to use spare production capacity in China as profitability in the market comes under pressure.
The group plans to introduce 50 plug-in hybrid and electric models in China by the end of the decade, reducing its reliance on petrol vehicles through its “in China for China” strategy.
Under that approach, vehicles are being designed and engineered within China.
Volkswagen has formed partnerships with Xpeng and SAIC Motor to speed up model development.
It has already started shipping vehicles made in China to the Middle East and Vietnam, and is considering a wider presence in South-East Asia, Latin America and Africa, where restrictions on Chinese technology are less stringent.
The company confirmed to FT that it has no intention of exporting those vehicles to Europe or the US.
Chief executive officer Oliver Blume, as cited in the report, said the fully localised approach made the company “faster, more competitive and, of course, more resilient even beyond China”.
Volkswagen has revised manufacturing capacity in China to match weaker demand for petrol-powered cars, but it still expects to keep spare capacity available for exports as new models are introduced.
The company’s operating profit in China dropped 45% to €958m ($1.12bn) last year, down from €1.7bn in 2024, as Chinese rivals took market share.
At the same time, a glut in production and continuing price pressure have driven Chinese manufacturers such as BYD and Geely to raise exports.
Total vehicle exports from China climbed to 7.1 million units in 2025, up from under one million in 2020.
