Volkswagen Reportedly Weighs China-Built Software for Up to 75% of Its Core European Models

A team under Volkswagen brand CEO Thomas Schäfer estimates that moving its mainstream European models onto software developed in China could save the group 4 billion to 5 billion euros, according to a published report.

The saving puts a number on a choice the group made in 2024, when it planned to invest up to $5.8 billion in Rivian and their joint venture, the route the report describes as the group’s software for Western markets. Moving most of the volume to CEA would put the two routes in direct competition for the same cars.

What would the China stack replace?

Up to 75% of the core models in Europe could eventually use the China Electronic Architecture (CEA), the report said, citing internal discussions that Schäfer confirmed. A second report put the plan at about 75% of next-generation Volkswagen, Skoda and Cupra models, pending review by group management.

Some inside the group question whether adapting CEA to European rules would be as cheap as its backers say, the report said. Backers of the Rivian route worry that fewer Volkswagen-brand cars on that technology would change how costs are shared in the partnership.

How proven is CEA?

Volkswagen says CEA already runs five new models across three joint ventures in China. Its engineers use AI agents, through a toolchain called C-Brain, to write, design and test the software.

Frank Han, chief executive of Volkswagen’s software unit CARIAD China, said a European rollout is technically feasible. Headquarters in Germany would make the decision, he added, and it would weigh factors including geopolitics. When Volkswagen announced on Oct. 28 where CEA would travel next, the markets were in the Global South, starting with South America by the end of the decade.

Some versions of the FAW-Volkswagen ID. AURA L5 sedan, shown at the China International Import Expo, will carry light detection and ranging (LiDAR) sensors and an end-to-end AI model for driving.

What does Rivian’s side look like?

Volkswagen said in November 2024 that it would invest up to $5.8 billion in Rivian and the joint venture by 2027. The venture was to use Rivian’s electrical architecture and software to support the first Volkswagen models as early as 2027.

The proposal still awaits review by group management, and the estimate does not say what adapting CEA to European rules would cost.