OPINION | Audi, SAIC, and the Future of EV Integration

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How the collaboration reflects the underlying seismic shifts in the automotive landscape and what it means for the future of EVs.

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I believe the automobile industry saw an inflection point this past week, though the majority of the world didn’t think much of it. 2 days ago, Audi and China’s state-owned automaker SAIC Motor confirmed they reached an agreement to partner together on Audi’s next-gen EV platform in the Chinese market.

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A little bit of history

In 1978, Germany’s Volkswagen signed a contract with SAIC to introduce advanced technology and develop the automobile industry. In 2023, VW’s Audi signed a contract with SAIC to introduce advanced technology and develop the automobile industry. However, 45 years later, the Chinese lead in technology.

Audi’s strategic decision to source SAIC’s EV platform for its next-gen product is not just a significant pivot in its portfolio but, more critically, an admission that in the fast-changing electric vehicles market, the company simply doesn’t have a competitive product lineup today and can’t navigate it alone anymore going forward.

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The data backs this up. Since 2020, foreign OEMs have seen a decline in market share to their domestic counterparts, propelled by BYD’s growth and a surge in Chinese EV startups (market share shifting from 35% to 49%). The sectors most affected were Japanese economy brands (with market share dipping from 24% to 17%) and German luxury brands (declining from 25% to 21%). In the NEV segments, their market shares are even less.

I believe 2 years from now, we’ll look back to this time as a watershed moment for the industry. Here’s why I think the implication of this deal is so important and what I think might happen over the next 12 months.

1. Legitimization of Chinese EV Technology

Audi, a brand historically synonymous with quality, innovation, and German engineering, is making a significant pivot to collaborate with SAIC on its next-gen platform. This sends a profound message to consumers, especially in China. Not too long ago, Audi was the vehicle of choice for many political leaders and important diplomats within the country.

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For decades, Western brands like Audi have been perceived as superior in terms of technology, innovation, and quality. By partnering with SAIC on EVs, Audi has placed a significant vote of confidence in Chinese technology.

While this deal will likely help Audi put out a more competitive product in the short term, it’s unclear whether this helps or hurts them in the long run. The prevalent sentiment among Chinese consumers might become: “If Chinese EV technology is good enough for Audi & the Germans, then it should be good enough for me.” Ironically, this sentiment might further accelerate the transition to domestic EV brands, as local consumers would now see those vehicles through a different lens that equates them with quality and reliability.

Ultimately, how the consumers perceive the brand will come from what value the legacy OEMs can bring to the ecosystem. But what’s clear is that the current status quo no longer works. 

2. The Ripple Effect on Other OEMs

Beyond the storied BBA (BMW, Mercedes-Benz, Audi) trio, I believe there’s now a palpable urgency among other foreign legacy brands, especially ones that do not have a competitive EV portfolio of their own. In the tech world, the early bird doesn’t just get the worm; it often gets the lion’s share of the ecosystem’s value. 

Brands like Range Rover, Jaguar, Lexus, and Acura, while having distinct brand equities, operate in an ecosystem where platform integrations are becoming increasingly pivotal. The exclusivity inherent in these types of partnerships means that alliances, once formed, leave competitors scrambling. With SAIC now under the Audi/VW umbrella and firing the first shot, the race is on for these other brands to secure their platform partners, lest they be left behind in the next wave of EV evolution. I think we could see a reshuffling of alliances going forward. 

3. The Geopolitical Supply Chain Implications

In tech, the supply chain has often been the unsung hero (or occasionally, the Achilles’ heel). Audi’s move potentially has broader ramifications for China’s supply chain ambitions. By integrating with a revered global brand, China’s supply chain ecosystem is poised to expand its influence internationally. If the China collaboration is successful, this could pave the way for more such collaborations and integrations abroad. If we were to look for a successful template, the Volvo/Geely one is probably a good template.

Obviously, this move can also have the opposite effect, where protectionism takes over, and the door to global markets gets shut in China’s face. It’s too early to tell which way the pendulum will swing, but I hope these partnerships will do more to tie these 2 economies together than push them apart. 


The lines between tech’s platform dynamics and the automotive industry’s value chains are increasingly blurring. Audi’s strategic embrace of SAIC’s EV platform might well be a precursor to a new automotive order, where platform control is the linchpin of value creation and aggregation. Those attuned to these shifts will be best placed to navigate and thrive in the EV era’s evolving landscape.

Yilun Zhang is the Director of Product at Hertz, an EV enthusiast, and a China auto insider. You can find him on X (Twitter) or Substack

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  1. A truly excellent article by Yilun Zhang. The European, Japanese and Chinese auto-industry and especially the EV “politic” is very good described and reflected on.

    There is no doubt that in order to survive, the legacy brands need help. And they have to go to China to find it. Or to Tesla. But cooperation and partnerships will be easier to find in China. Then there is also the battery technology. Also here China is far ahead. Too far ahead in both platforms and batteries for legacy brands to catch up before they go broke. As an example; in Norway there is one factory under construction and another one planned for making NMC batteries. China is no 4 generations ahead of this if you count LFP, LMFP, M3P and Sodium (natrum, salt).

    All this is very god news also for China – and perhaps the world. Because the European and Japanese industry will not be able to ‘lock out’ Chinese parts and products from their markets then.
    Some of the first to go out of the market could/would or will be: Land Rover/Jaguar, Mazda, Subaru, Mitsubishi (already left China), Nissan, and finally Toyota. And the whole Stellantis group, with JEEP already gone bankrupt in China.

    But there is also another upside for Chinese industry. Outside China. I.e. the European market has not yet understood or acknowledged that China is 5 – 10 years ahead in this industry. And are still a little skeptical to Chinese brands. But with the knowledge – via the press – that many well established European brands use Chinese technology, not only Volvo, Lotus, – this attitude will change in Europe. And Chinese brands will be recognized for their excellent quality and advanced tech.

    But the Chinese exporters need to control the customer prices in Europe better. There is no argument for doubling the Chinese prices in the European market. Shipping isn’t THAT expensive.

    Geopolitically, will the cooperation and/or integration with Chinese industry help the world peace? China is not stupid, as long as they can continue to achieve huge export income, this will avoid that China does something stupid in their national politic, i.e. military aggression. I trust. Then China would lose it’s major income sources. So yes, there are even a geopolitical side to this.

  2. Who knows. First let’s see what Audi will do with this cooperation. What will they use exactly. Maybe complete platform. maybe they will make some changes. Maybe they will only use computer hardware and some of software parts. Maybe they will still integrate their own motors and Battery specifications into SAIC’s platform. But even if they would use complete SAICS’s platform, as it is, there is a lot of car left to build on that. It all depends what they will made of this at the end. And what reviews would say…

    It could be good for both sides. VAG could learn from it, and speed up in developing their own platform. SAIC would benefit if Audi would export those cars to Europe, and if they have good sale numbers… Then Europeans would be much more interested in other SAIC or other Chinese cars…

  3. Eventually, VAG will bring this technology to Europe and build it there. This is really a frank admission on the part of VAG that the fasted way to advanced EV systems is to ride with Chinese experience. No doubt others will come to the same conclusions. Will anti-Chinese rhetoric stop the Americans from coming to play?

  4. Did Western capitalists join with China (by joint ventures) in developing the rope with which it will hang its own auto industries?
    Or, can we hope, and pray, to rather see peace facilitated through global automotive trade and cooperation?



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