When Audi executives first encountered the Zeekr 001 in 2021, it was more than just another electric vehicle; it represented a shift in the premium auto industry.

The long-range Chinese EV, with its European styling and advanced technology, sent ripples through Germany’s automotive sector.

“The Zeekr 001 shocked quite everyone,” admitted Stefan Poetzl, president of SAIC Audi Sales and Marketing. “We needed to do something about it.”

Audi’s quick response

That need led to the development of the AUDI E5 Sportback, a $33,000 electric vehicle created in just 18 months. Powered by batteries and an electric drivetrain, along with software from Chinese partner SAIC, the car is set to debut in Chinese showrooms this month. For Audi, this collaboration is driven more by necessity than pride, as Chinese manufacturers set the pace in the market.

Other major automakers are following suit. Toyota has partnered with GAC, Volkswagen is collaborating with Xpeng, and both Renault and Ford are exploring ways to leverage Chinese EV platforms for global models.

A “China Inside” moment for EVs

Experts liken this trend to the “Intel Inside” campaign of the 1990s. Just as Intel chips powered high-end PCs, Chinese EV manufacturers now offer ready-to-use platforms, chassis, batteries, and software that allow automakers to launch new models quickly and cost-effectively.

For instance, Leapmotor has teamed up with Stellantis to facilitate the overseas expansion of Chinese EVs, while Renault’s budget-friendly Dacia Spring in Europe is built on a Chinese platform. Ford is also seeking a Chinese partner, with CEO Jim Farley praising Xiaomi’s SU7 sedan.

Volkswagen has broadened its plans to utilise Xpeng’s technology for models focused on the Chinese market, with potential implications for VW’s global strategy if successful.

A Win-Win scenario

For Western automakers, the benefits are clear: significant cost savings, reduced development timelines, and a chance to catch up with agile Chinese rivals.

For Chinese firms, licensing agreements provide crucial revenue amid intense domestic competition and increasing trade restrictions abroad.

“It is a very smart, win-win solution,” commented Will Wang of Shanghai-based Autodatas, which analyzes EV technology.

Lingering concerns

However, not everyone is optimistic about the long-term viability of these partnerships. Former Aston Martin CEO Andy Palmer cautioned that excessive reliance on Chinese technology could diminish legacy automakers to mere “retailers” without unique brand identities.

Consultants suggest that while licensing may aid survival in the current EV arms race, integrating proprietary technology will be vital for long-term relevance.

For now, the message is clear: to compete in the electric vehicle arena, automakers may need to embrace a bit of “China inside.”