Volkswagen’s efforts to regain momentum in China are facing another setback, with the ID. Unyx 08 reportedly selling at a fraction of the company’s target despite being developed through its partnership with Xpeng.

China was once responsible for almost half of Volkswagen Group’s total profits. That contribution has now dropped to roughly 10%, increasing pressure on the automaker’s China-specific electric-vehicle strategy.

Sales fall well below target

Volkswagen joined forces with Xpeng more than three years ago, investing $700 million for a 4.99% stake in the Chinese automaker. The companies also created a dedicated electrical and electronics architecture for electrified models, including the ID. Unyx 08 and ID. Unyx 09.

The strategy was intended to let Volkswagen develop, design and build vehicles in China for local customers. However, Reuters reports that the ID. Unyx 08 averaged only 267 monthly sales between April and August. That figure is less than 10% of Volkswagen’s target of up to 3,622 vehicles per month.

Volkswagen had initially forecast sales of 32,600 units during 2026, followed by as many as 70,400 in 2027 and more than 120,000 annually in the years ahead. Earlier this year, the company reduced its 2026 target to 12,300 vehicles and cut its 2027 goal to 64,000. Based on the reported sales pace, both revised targets appear difficult to reach.

Technology and dealership access remain challenges

The ID. Unyx 08 features a design that differs significantly from Volkswagen models sold in Western markets. Its cabin includes the expansive infotainment and passenger displays commonly found in newer Chinese electric vehicles.

However, the model reportedly lacks some of the technology offered by rivals such as the Xiaomi YU7. It also does not match the fast-charging capability of the Zeekr 7X, placing it at a disadvantage in a crowded electric-vehicle market.

Volkswagen’s distribution strategy may also have limited the model’s reach. The ID. Unyx 08 has primarily been sold through approximately 166 Volkswagen Anhui dealerships. It has not been distributed through the much larger networks operated with FAW and SAIC, which together include more than 3,000 dealerships.

ID. Unyx 09 enters a competitive segment

The weak performance of the ID. Unyx 08 has not ended Volkswagen’s China ambitions. The automaker believes it could sell as many as 4,900 examples of the ID. Unyx 09 sedan each month, with a potential annual volume of up to 90,000 units by 2034.

The low-slung sedan shares a similar design approach with the ID. Unyx 08. It is offered with 82-kWh and 95-kWh battery packs and produces up to 496 horsepower. The model will compete in a segment that includes the Tesla Model 3 and Xiaomi SU7, both of which are already established choices for Chinese buyers.

Possible exports to Europe

Volkswagen could also look beyond China’s domestic market to improve the business case for vehicles produced there. Earlier this year, reports indicated that the automaker was considering importing China-built models into Europe, potentially beginning with the ID. Era 9X, which is built alongside SAIC.

That approach would expose the vehicles to significant import costs. SAIC-built vehicles currently face a 35% duty in addition to the European Union’s standard import tariff. Producing the models in Europe, possibly at underused German factories, could avoid those charges, although such a move would require negotiations with the IG Metall union.

For now, Volkswagen’s China-specific electric vehicles remain well short of their sales ambitions, while the ID. Unyx 09 represents another attempt to establish a stronger position in an increasingly competitive market.