Volkswagen’s first electric SUV developed with Xpeng averaged just 267 sales a month in China between its April launch and August, roughly only 7% of the 3,622 monthly sales originally targeted. An investigation by Reuters on the 20th of October reveals how the ID. UNYX 08’s disappointing launch has complicated Volkswagen’s efforts to regain traction in the world’s largest EV market.
The SUV reached production in just two years, but pricing, competition and a limited dealership network have held back sales, Reuters found. Volkswagen maintains that its partnership with Xpeng has delivered important technology beyond this single vehicle.
Volkswagen Cut Its 2026 Sales Forecast by More Than 60%
Reuters reporters Ju-min Park and Christina Amann reviewed internal planning documents and interviewed six people familiar with Volkswagen.
The documents show that Volkswagen reduced its 2026 UNYX 08 forecast from 32,600 vehicles to 12,300. Volkswagen did not comment on the forecasts in the documents. Recent advertisements also offered a 17% discount on the SUV’s April launch price. After a September refresh, the UNYX 08 started at a limited-time 189,900 yuan ($28,030), down from 229,900 yuan at launch, CnEVPost reported.
Volkswagen’s announcement in March confirmed that Volkswagen and Xpeng developed the SUV and prepared it for mass production in just two years. EVXL previously examined the model’s Chinese technology and unusual design, which departed sharply from Volkswagen’s traditional styling.
Xiaomi and Zeekr Outsold the UNYX 08 by Wide Margins
ThinkerCar data cited by Reuters show approximately 1,300 UNYX 08 sales between April and August. During the same period, Xiaomi sold nearly 57,000 YU7 SUVs, while Zeekr sold more than 21,000 7Xs.
Reuters identified stronger technology offerings among similarly priced rivals, including Xiaomi’s advanced sensor package and Zeekr’s fast-charging capabilities.
Gartner research vice president Pedro Pacheco told Reuters that Chinese consumers increasingly question paying more for German vehicles when domestic brands provide advanced technology at lower prices.
Bernstein analyst Stephen Reitman also noted that vehicles resembling Volkswagen’s planned Xpeng-developed models were already appearing at the 2024 Beijing auto show.
A Smaller Dealer Network Made the SUV Harder to Find
Five people told Reuters that Volkswagen largely relied on its newer Anhui dealership network instead of the more than 3,000 dealerships operated through its established partnerships with FAW and SAIC. Two sources said that limited distribution left many potential buyers unaware of the vehicle.
Volkswagen expanded its Anhui dealership network from approximately 140 outlets in April 2026, according to CnEVPost, to 166 this month, the company told Reuters. The company has also worked with selected FAW-Volkswagen dealerships since April to reach more customers.
Volkswagen Says the Xpeng Partnership Has Delivered Results
In a statement to Reuters, Volkswagen said its partnership with Xpeng has delivered a new electronic architecture for locally made models, and called the UNYX 08 and the related UNYX 09 additional outcomes. Xpeng declined to comment.
Volkswagen’s original 2023 agreement involved an approximately $700 million investment for a 4.99% stake in Xpeng. The companies initially agreed to collaboratively develop two Volkswagen-branded EVs for China.
Their separate China Electronic Architecture reached production readiness in 18 months, according to Volkswagen’s January announcement. It first entered production with the ID. UNYX 07, rather than the UNYX 08.
Developed with Volkswagen Group China Technology Company, CARIAD China and Xpeng, the architecture centralizes vehicle computing and supports wireless software updates.
EVXL previously covered Volkswagen’s decision to centralize more EV development in China to compete with domestic manufacturers.
The Next Xpeng-Developed Sedan Faces Another Ambitious Target
Volkswagen’s related ID. UNYX 09 sedan is scheduled to reach Chinese showrooms this month. Reuters reports that internal plans forecast nearly 4,900 monthly sales.
Two people familiar with Volkswagen’s internal planning told Reuters that the need to win approval for new models from Wolfsburg headquarters can push Volkswagen’s managers to submit overly optimistic sales projections.
Volkswagen’s passenger-car market share in China has fallen from approximately 20% in 2019 to 10% during the first eight months of 2026, according to the China Passenger Car Association. Reuters also reports that China’s contribution to Volkswagen Group profits has dropped from nearly half to about 10%.
Volkswagen now needs to prove that its partnerships with Chinese companies like Xpeng can help it sell more EVs in China.
EVXL’s Take
Volkswagen has demonstrated that working with Xpeng can shorten development times. What it has not demonstrated is that faster engineering translates into stronger sales.
The limited dealership network was a particularly questionable decision in a market where domestic competitors already have major advantages. And the Chinese EV market is already very competitive.
The upcoming UNYX 09 will provide insight into Volkswagen’s strategy. If pricing and distribution remain weak, faster product development alone again won’t reverse the company’s decline in China.
Sources: Reuters, Volkswagen, CnEVPost
EVXL uses automated tools to support research and source retrieval. All reporting is by Damien Kesteloo, edited by Haye Kesteloo.
