Volkswagen Weighs Chinese Software for European EVs While Battery Recall Hits 72,700 Vehicles
Published on 10/27/2026 at 15:11 | Editorial boerse-global.de
Volkswagen is quietly redrawing the map of its software strategy, and the stakes run into the billions. According to reporting by n-tv on Monday citing an insider, Europe's largest automaker is considering replacing the Rivian-based software solution in its European volume models with technology developed in China. Manager Magazin puts the potential savings at EUR 4–5 billion in total. No approval from the group's board of management has yet been granted.
The proposal would mark a notable detour from the cooperation Volkswagen agreed with Rivian in 2024, under which the ID.Every1 is slated to become the first vehicle to carry the jointly developed software in 2027. VW brand chief Thomas Schäfer aims to present the plan to the board before the end of 2026. Models in the frame include the ID.Golf, the ID.Passat and the Skoda Enyaq.
A Cost Option, Not a Confirmed Saving
How much of that EUR 4–5 billion actually materializes depends on which vehicles the board ultimately folds into the plan. The proposal is confined to European volume models — it does not, on current evidence, amount to a wholesale exit from the Rivian partnership, and no decision on the named models has been taken. Until the board signs off, the relief remains a strategic option rather than a line item in already-secured earnings improvements.
The same caution applies to a separate Reuters report from Monday, which said Volkswagen is weighing whether to deploy an architecture developed with Xpeng for China in Europe as well. That China Electronic Architecture could, per the report, become the basis for future models from the Volkswagen, Ĺ koda and Cupra brands. Reuters cited Manager Magazin, noting the proposal was due to be presented to the board on Tuesday; no approved rollout was reported.
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NXP Chosen for Zonal Architecture
On the technology-partner front, Volkswagen said Monday it had selected NXP Semiconductors as a strategic partner. Microcontrollers from the S32K5 family are to form part of a future zonal architecture for software-defined vehicles, with the first car built on that architecture scheduled for 2027.
Battery Recall Covers Almost 72,700 EVs
The software debate unfolds against a backdrop of quality and labor troubles. On October 20, Volkswagen recalled almost 72,700 electric vehicles worldwide over possible defects in individual high-voltage battery cells. Roughly 10,000 vehicles are affected in Germany, according to the Kraftfahrt-Bundesamt. As a precaution, owners were told to charge the affected cars to no more than 80 percent.
The recall mainly covers the ID.3, ID.4, ID.7, ID. Buzz and Cupra Born. Reuters also reported a recall of more than 9,000 Audi Q4 e-tron and Q4 Sportback e-tron vehicles in the US over a possible fault in the high-voltage battery system. Volkswagen said some batteries may fail to meet quality requirements and that the cause is under investigation.
Union Sets January 2027 Strike Deadline
Labor relations are heating up in parallel. IG Metall threatened on Friday to call industrial action from January 2027 unless Volkswagen withdraws its termination of collective agreements by the end of October. The two sides did agree to open formal negotiations on November 24 in Emden, with talks over the terminated agreements and each side's demands continuing on December 15 in Zwickau, according to a company statement.
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Quarterly Report to Quantify the Pressure
Just how urgently Volkswagen needs savings should become clearer with its quarterly report, scheduled for October 29, 2026. Jefferies expects an operating loss of up to EUR 6.2 billion for the third quarter; RBC models an operating shortfall of EUR 5.8 billion. A planned Porsche write-down of around EUR 6 billion sits at the center of the quarter, and further special items could add to the burden. The market consensus for quarterly revenue stands at EUR 78.2 billion, with a net loss of EUR 5.7 billion anticipated.
That makes for two distinct timelines for investors to weigh. The October 29 report will put a figure on near-term charges. Schäfer's software proposal, by contrast, must first clear the board — and only a concrete resolution would turn the discussed savings into a firmer building block of the group's cost-cutting drive.
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