Volkswagen to add AI voice commands to China-market cars this year

Volkswagen said it will incorporate AI voice commands into its cars for the Chinese market.

Starting in the second half of this year, all vehicles based on Volkswagen's China car system will feature AI agents that allow drivers to control vehicle functions with voice commands, the company said on Tuesday.

"The car should be like a companion," Volkswagen China CTO Thomas Ulbrich told CNBC's Eunice Yoon.

He said the company's in-car AI agent would draw on technology from Tencent, Alibaba and Baidu, among others, to create a tool with "personality" that can anticipate a driver's needs.

The AI uses a locally trained large language model and runs entirely on the car rather than in the cloud.

Volkswagen also revealed four cars in Beijing on Tuesday, including the ID. UNYX 09, which the company said it co-developed with EV maker Xpeng in two years.

The move is part of Volkswagen's strategy to recoup lost market share as China has rapidly shifted toward electric cars from vehicles powered by internal combustion engines.

Over the last few years, Volkswagen has invested heavily in China, taking stakes in Xpeng and automotive chipmaker Horizon Robotics.

With those partnerships, the German automaker is not using Nvidia chips in its cars in China. Instead, Volkswagen is using Xpeng's Turing chip in an electric SUV set to begin deliveries by the end of June, while an advanced automotive chip project with Horizon Robotics remains under development.

Volkswagen also announced on Tuesday that, starting next year, it will use agentic AI to power a unified driver-assist and cockpit control system.

In November, the automaker said its research center in Hefei could independently develop and approve technology for its Chinese cars, reducing time to market.

Over the last two years, German automotive companies in China have significantly increased research and development activities in the country to serve both the local and global market, according to a report released Tuesday by the German Chamber of Commerce in China.

Nearly 80% of automotive companies surveyed by the chamber said localizing R&D in China had lowered costs compared with Germany over the last two years, while about 43% said their innovation speed had increased by more than 40%, the report said.