Volkswagen Group has completed the final expansion of its Volkswagen Group China Technology Company (VCTC) in Hefei, marking a significant step in the company's ability to develop and validate vehicles specifically for the Chinese market. The new Test Workshops provide end-to-end development capabilities, allowing Volkswagen to integrate software, hardware, and full-vehicle validation processes under one roof.
The VCTC now stands as Volkswagen’s most comprehensive research and development hub outside Germany. For the first time, the company can support vehicle platform development from early phases entirely outside its home country. The facility includes more than 100 laboratories across approximately 100,000 square meters, enabling extensive testing in areas such as battery systems, powertrains, software-hardware integration, and complete vehicle validation.
Oliver Blume, CEO of Volkswagen Group, said: “Our ‘In China for China’ strategy continues to gain momentum. At our development centre in Hefei, China, we have now created all the conditions necessary to develop, test and locally manufacture the next generation of intelligent connected vehicles. This milestone makes us even faster and more efficient – and brings us even closer to our customers. This will enable us, as the Volkswagen Group, to consolidate our position in the world's largest automotive market with the clear goal of becoming the global technology driver of the automotive industry."
Ralf Brandstätter, Member of the Board of Management of Volkswagen AG responsible for China and Chairman and CEO of Volkswagen Group China added: “China is the world’s most competitive automotive market, and our customers here expect rapid innovation and flawless quality. This is why we are taking our development capabilities in China for China to the next level. 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 VCTC serves a central role in advancing Volkswagen’s strategy tailored for China by focusing exclusively on electric vehicles as well as intelligent and connected mobility solutions. The center coordinates with joint ventures’ R&D units while integrating core decision-making processes locally. With this setup, Volkswagen aims to address trends such as digitalization and autonomous driving at an early stage.
A key project highlighted during this expansion is collaboration between VCTC and CARIAD China on delivering a new zonal electronic architecture called CEA within 18 months. Using a software-defined vehicle approach has allowed them to reduce overall vehicle development cycles by about 30% while also cutting costs on select projects by up to half through local supplier involvement during early concept phases.
Thomas Ulbrich, CTO of Volkswagen Group China and CEO of VCTC commented: “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.”
The expanded facilities include centers dedicated to battery system testing—capable of evaluating up to 500 battery systems per year—as well as powertrain integration tests that assess safety, durability, environmental robustness along with electronics performance.
An advanced Electromagnetic Compatibility laboratory ensures reliability standards for vehicle electronics while a full-vehicle durability test bench simulates global road conditions inside the workshop itself.
Volkswagen is also planning further enhancements at Hefei with a Functions Integration Test Laboratory scheduled for mid-2026 that will simulate extreme environmental conditions—one of only two such labs within Volkswagen globally.
These developments strengthen Volkswagen's position within China's automotive sector by allowing earlier product validation not only for domestic needs but also for export markets including ASEAN countries and regions like the Middle East.