Volkswagen‘s brand chief wants to build about three-quarters of the next generation of Volkswagen, Skoda and Cupra models on software and electronics the group developed in China with XPeng, instead of technology from its US partner Rivian, manager magazin reported.
Thomas Schäfer, who runs the Volkswagen brand and the group’s Core brand group, will bring the proposal to the management board on Tuesday, the magazine said on Monday, citing insiders.
Switching would be “a fundamental change” in the group’s technology strategy, it said.
Schäfer’s team calculated that the group could save €4 billion to €5 billion ($4.5 billion to $5.6 billion) by moving its most important vehicle segment to the Chinese architecture, according to the report. That covers future generations of electric models such as the ID. Golf, the ID. Passat and the Skoda Enyaq.
Volkswagen declined to comment on the report to Reuters.
Four times the cost
The magazine said supporters of the switch now carry comparison figures with them.
An engineering hour at RV Tech, the software joint venture Volkswagen formed with Rivian in 2024, costs about four times as much as one at VCTC, Volkswagen’s development center in Hefei, China, according to the report.
A model like the electric Tiguan, developed and built in Europe, costs about €8,000 ($8,900) more than it would if it were developed in China, the magazine said.
Schäfer wants the China Electrical Architecture (CEA) for the SSP31 f and h platforms, according to the report. That would cover every electric car above the size of the Polo, including the Tiguan family, which the magazine called the group’s largest model group, with a million cars sold in 2025.
The magazine said Schäfer no longer plans a new architecture for gasoline and diesel cars at Volkswagen, Skoda and Seat, and will only update existing models.
What CEA is
Volkswagen began developing its own software architecture in China with XPeng in 2023, according to the report.
Chief Executive Officer Oliver Blume and Ralf Brandstätter, the board member for China, concluded that the software the group used elsewhere could not compete with Chinese rivals, the magazine said.
Brandstätter brought Thomas Ulbrich, the former Volkswagen production and development chief, to China. VCTC, working with the China arm of software unit Cariad, developed the XPeng architecture further into CEA for Volkswagen models.
Volkswagen now holds the intellectual property rights, according to company statements cited by the magazine.
The architecture is zonal and handles over-the-air updates “without problems,” according to reports from China cited by manager magazin. The rest of the group does not yet have that, it said, and software failures are among the most common problems at Audi and Porsche.
Volkswagen has said CEA will also underpin its Level 3 automated driving push in China.
Brandstätter posted on LinkedIn on Friday that the electric ID. Aura T6 SUV and the ID. Era 5S plug-in hybrid had each drawn 30,000 orders within weeks of launch.
The Jetta M6 reached about 10,000 orders overnight after its unveiling. Volkswagen headquarters says the group has never sold as many EVs in China in a single month as in October 2026, the report said.
Rivian’s place in the plan
Blume currently plans to split the group’s software in two, according to the report.
Brandstätter and Ulbrich serve China and will increasingly export cars with VCTC technology to Latin America, Asia and Australia. Models for Europe and the US use Rivian software, and the premium and luxury brands rely almost entirely on Rivian’s zonal architecture.
Schäfer wants to move that line for most volume models. Because Chinese software is hard to imagine on US roads, the magazine said, the split would become North America and the rest of the world.
The small ID. 1 is due to be the first Volkswagen-brand car with a Rivian architecture at the end of 2027, the magazine said. Rivian skeptics, who it said are especially strong at the Volkswagen brand, warn that the software will not be ready for the group’s full SSP electric generation until the end of 2028 at the earliest.
Rivian has a partnership with Volkswagen worth up to $5.8 billion. It drew a $1 billion, 10-year loan from Volkswagenearlier this month, secured by its half of the venture, leaving $460 million still to come.
Rivian Founder and CEO RJ Scaringe said on October 19 that he expects the relationship to “continue to expand and grow.”
Rivian shares closed down 3.4% at $11.43 on Monday after the report, a fresh 52-week low. The stock is down 42% this year.
A second attempt
Schäfer has taken the plan to the board before, with Brandstätter’s support, according to the report.
Reactions were positive, and some board members found the presentation “eye-opening,” the magazine said. But after about two and a half hours, the conclusion was that the group had a clear agenda for its software architectures and that it should stay that way.
Some board members argue that adapting CEA to European regulations will not be as easy or as cheap as presented, and that developing it into a kind of CEA 3.0 carries risk, according to the report.
Audi CEO Gernot Döllner helped push the Rivian alliance in 2024 and still relies heavily on the California software outside China, the magazine said. Rivian’s backers fear their cost position would suffer if Volkswagen largely left the alliance.
The savings pressure
Under savings targets the supervisory board approved in early September, the Core brand group, made up of Volkswagen, Skoda, Seat and Cupra and Volkswagen Commercial Vehicles, must lift earnings by more than €12 billion ($13.4 billion) by 2030 compared with current forecasts, according to the magazine. It must also cut planned investment by almost €15 billion ($16.7 billion).
“For Thomas Schäfer, the decision would be a huge relief,” one person involved told the magazine.
Many in the group expect Stellantis brands, including Opel, to field models built on technology from Chinese partner Leapmotor, the report said. They worry that Volkswagen and Skoda would be too slow and too expensive on Rivian software in the long run.
Audi’s US move
The board discussion is likely to be overshadowed by Döllner’s appearance with US President Donald Trump to announce an Audi factory in the US, the magazine said.
Döllner ignored a guideline in the group’s own “Booklet of Policies” in doing so, which caused a “medium-sized earthquake” inside Volkswagen, according to the report. Schäfer’s project would also be a strategic decision if he convinces the board, it said, but a far less politically charged one.
Audi plans to invest about $4 billion in the Georgia plant, which will build premium SUVs for North America about 75 miles from the factory Rivian is building in the same state.
