VW's First Car Made With Xpeng Isn't Popular. Here's Why It Matters

The ID. Unyx 08 was supposed to help turn around Volkswagen in China. Instead, it struggles to move more than 250 units per month.

Photo by: Volkswagen

By: Kevin Williams

Oct 24, at 9:00am ET

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According to Reuters, the VW ID. Unyx 08 is only selling about 267 units per month. This is well below its goal of 3,622 per month.
The ID. Unyx 08 is co-developed with Xpeng, and made at VW's Anhui plant.
VW is considering selling the Xpeng-based ID. Unyx models in markets outside of China.

Volkswagen has a plan to turn around its struggling China business: team up on a deeper level with Chinese carmakers to develop better EVs more quickly and cheaply. The problem? Sales aren’t panning out, according to a Reuters report from this week.

VW has a partnership with Xpeng in China for platform and software development, mirroring the work it does with Rivian in the U.S. The first model from the tie-up, the ID. Unyx 08, has been on sale since this April. It is underperforming in China’s market, with only about 267 units sold per month through August, according to ThinkerCar data cited by Reuters. According to internal company documents seen by Reuters, the automaker initially aimed to sell far more, about 3,622 units per month. (Volkswagen didn’t comment on the sales goals when contacted by the outlet.)

It’s a blow to a strategy that lots of automakers—not just VW—are leaning on to claw back market share in the world’s biggest car market. As Chinese consumers pivot en masse to EVs made by the country’s own homegrown brands, European automakers have struggled. VW, once one of the best-selling brands in China, has seen its sales slip significantly. In 2019, the Volkswagen Group sold a record 4.2 million cars in China. By last year, annual sales had dropped to 2.69 million.

VW ID. Unyx 08

Photo by: Volkswagen

For those who aren’t in the know, the Volkswagen ID. Unyx 08 is a midsize EV that competes in China’s premium crossover segment. Underneath, it shares much of its guts with the Xpeng G9, and it's made at Volkswagen’s Anhui manufacturing plant. Pricing for the ID. Unyx 08 starts at around $35,000, a bargain for those here in the West, but par for the course in China’s market. By comparison, the ID. Unyx 08’s two biggest competitors, the Xiaomi YU7 and Zeekr 7X, are slightly cheaper and easier to buy, which may explain some of the sales issues. Whereas the ID. Unyx is only sold at special Volkswagen ID. Unyx dealerships, the Xiaomi and are sold in accessible dealers found in nearly every higher-end mall in China.

This isn’t great for VW, which is still pressing onward with its tie-up with Xpeng. According to Reuters, its next Xpeng-based model, the ID. Unyx 09 sedan, has an even more aggressive goal of 4,900 units per month.

2026 Volkswagen ID. UNYX 09

Photo by: Volkswagen

Volkswagen’s struggles prove that developing cars cheaper and at so-called “China speed” is only half the battle. Yes, the ID. Unyx 08 and 09 came to market quicker than normal, but that doesn’t mean they’re what people actually want. These cars have to be desirable to consumers, and judging by the sales of the ID. Unyx 08, it isn’t resonating. Reuters notes that the ID. Unyx is outclassed by the aforementioned Xiaomi YU7 and Zeekr 7X. Xiaomi’s advanced sensor package and integration with its integration with Xiaomi’s consumer electronics products is hard to beat, as are the Zeekr 7X’s strong DC fast charging speeds. “Chinese customers ask: Why buy ⁠an expensive German car if they can get the technology much cheaper,” Pedro Pacheco, vice president of research at Gartner, told Reuters. Volkswagen may have the speed, but does it have the execution to meet the market where it is? Perhaps not.

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But the strategy is necessarily a bad idea. Toyota, which has a partnership with GAC, has several BZ models that use GAC mechanicals and software. The BZ3X, an EV crossover that shares much of its design with the GAC Aion V, has been a sales success in China. Earlier this year, it claimed the title of being China’s best-selling joint-venture EV, selling a record 10,000 units in the month of April alone.

VW has tried to stimulate sales; Reuters reported that the automaker is working to expand its network of ID. Unyx dealerships. And Volkswagen has cut the price of the ID. Unyx 08 to about $28,500. There’s an effort to right the ship, but only time will tell if it will work. In the meantime, I wouldn’t be surprised if some of VW’s excess stock from its Anhui plant shows up in other places outside of China.