Volkswagen’s flagship brand Audi said on Monday that it and its Chinese joint venture partner SAIC will work together to build a new intelligent and electric car platform tailored for China.

The decision underscores growing pressure on legacy automakers and western brands to restructure in order to survive an increasing EV competition in the largest car market in the world. It coincides with around ten months after VW’s historic Chinese cooperation pact.

A lengthy EV price battle has caused Audi to trail well behind Tesla and other Chinese rivals in EV sales.

The Advanced Digitised Platform, a new architecture that “enables Audi to significantly reduce time-to-market by more than 30%,” is the foundation upon which Audi and SAIC will build vehicles, the Germany-based heritage brand said in a statement.

The announcement states that the first of three EV models to be powered by the new platform will be on sale in 2025.

The news clarified the intentions for increased collaboration between Audi and SAIC, which were first revealed by VW in July when it declared it will acquire 4.99% of Xpeng (9868.HK), establishes a new tab for around $700 million, and collaborate on the introduction of two Volkswagen-badged electric vehicles by 2026.

Franco-Italian carmaker Stellantis said earlier this month that its partnership with Chinese partner Leapmotor will start selling two Leapmotor vehicles in Europe starting in September, another illustration of Europe’s growing dependence on Chinese competence in EVs.

Through its two partnerships, one with SAIC and the other with FAW, Audi has used VW’s EV-dedicated MEB platform for two EV models in China, the Q4 e-tron and Q5 e-tron, while simultaneously creating a new EV platform with Porsche.

Beginning in 2025, Audi’s joint venture with FAW in China will produce the first electric vehicle (EV) based on the Premium Platform Electric (PPE) architecture developed by the company’s headquarters. 

The advanced driver assistance system (ADAS) from Huawei will be installed in the Audi Q6L e-tron in China, according to a prior report from Reuters.

Reuters calculated the total sales of Audi’s two electric vehicle models in China in the first four months, using data from the China Passenger auto Association and ByteDance’s auto information portal Dongchedi. This amount represents 0.45% of all EV sales in China.

(Adapted from CNBC.com)

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