European car companies are changing how they build cars for the future. They now look directly to China for new ideas rather than just seeing the country as a massive market for selling vehicles. Since 2018, financial records show that major European brands such as Volkswagen, Stellantis, Mercedes-Benz, and BMW Group have partnered with at least 38 Chinese technology companies and research groups. These European giants want direct help with advanced software, batteries, and vehicle computers.
This new teamwork moves at lightning speed. On March 13 of this year, Volkswagen and Chinese electric car maker XPeng released their first shared vehicle model. Factory workers in the city of Hefei drove the brand-new ID. UNYX 08 straight off the assembly line. The two companies took only 24 months to design the car, sign the paperwork, and start mass production.
Volkswagen Group China Chairman Ralf Brandstatter believes China currently operates the most competitive car market in the world. To stay on top of changing trends, Volkswagen invested about 3.5 billion euros (roughly 4.1 billion dollars) in the Hefei factory. They built a massive hub dedicated entirely to building electric cars and finding new parts. The company plans to release more than 20 new electric models this year alone.
Leaders in Germany see great value in this expanding teamwork. Hildegard Mueller, president of the German Association of the Automotive Industry, said both countries bring something very special to the table. German companies offer high safety standards and incredibly strong engineering skills. Meanwhile, Chinese companies quickly test out brand-new technologies and push the entire industry forward.
Other European companies are actively taking advantage of new Chinese business rules. In March, the Swedish heavy truck company Scania delivered its first batch of NEXT ERA trucks from a brand-new factory in Rugao. Scania fully owns and operates this specific facility, which opened its doors last October. The factory workers plan to build exactly 50,000 heavy-duty trucks every single year.
Scania could only build this modern factory because the Chinese government changed its strict rules back in 2020. The government removed older limits that stopped foreign commercial vehicle makers from owning their own plants completely. Scania quickly signed the paperwork and made its largest overseas investment in nearly 70 years. Executive Vice President Camilla Dewoon said the new license helps her company run things much more efficiently and test new ideas.
Cross-border collaboration also helps Chinese brands sell many more cars in Europe. In 2024, the Chinese car brand Leapmotor sold just 771 cars to European buyers. However, in 2025, Leapmotor sold over 67,000 vehicles overseas, including more than 20,000 cars right inside Europe. This massive jump happened because Leapmotor joined forces with Stellantis, the fourth-largest carmaker in the world.
Stellantis wants to make huge changes to its European vehicle lineup over the next decade. The company plans to sell exactly 100 percent electric passenger cars in Europe by 2030 and reach zero carbon emissions by 2038. To hit these tough environmental goals, Stellantis formed a special business partnership called Leapmotor International. By June of last year, this combined team had successfully launched Leapmotor cars in more than 30 overseas markets.
The cooperation between these two regions now goes far beyond just building the actual cars. In November of last year, Stellantis and the Chinese battery giant CATL started building a massive new factory in Aragon, Spain. The two companies will spend exactly 4.1 billion euros to construct the plant. The modern facility will run entirely on renewable energy and start making powerful batteries by the end of 2026.
Auto industry expert Ferdinand Dudenhoeffer notes that China offers huge markets and excellent supply chains. Chinese factories produce cutting-edge batteries and self-driving computers at record speeds. Because of this rapid pace of innovation, European auto companies will continue to work closely with China to build the green cars of tomorrow.
