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March 31, 2025 – Shanghai/Tianjin – Volkswagen Automatic Transmission (Tianjin) Co., Ltd. and Leadrive Technology (Shanghai) Co., Ltd. have signed a strategic memorandum of understanding (MoU) to jointly develop and industrialize silicon carbide (SiC) power modules for new energy vehicles, deepening their existing technical ties.
The partnership, announced in Tianjin, represents a targeted move by Volkswagen to secure and localize key semiconductor components for its electric-drive systems in China. Under the MoU, the two companies will focus on SiC modules, integrated power bricks, and advanced electric-drive solutions, aiming to bring high-performance, cost-effective powertrain technologies into production more quickly.
Silicon carbide power modules offer significant advantages over traditional silicon-based devices: higher switching frequency, lower thermal losses, and greater efficiency at high voltages. These characteristics are critical for next-generation electric vehicles, where every percentage point of efficiency gain translates directly into longer driving range and reduced battery costs. Industry analysts estimate that SiC-based inverters can improve overall EV efficiency by 5–10%, making them a priority for automakers racing to cut costs and extend range.
The MoU extends a technical relationship that already covers electric-drive systems and dual-controller solutions for hybrid powertrains. By moving into power semiconductor modules, Volkswagen and Leadrive are now coordinating across the entire power-electronics chain: from semiconductor design and module packaging to electronic control and final drive integration. This vertical approach is expected to shorten development cycles and optimize system-level performance.
The deal aligns with Volkswagen Group's long-standing localization push. The Tianjin facility, originally focused on automatic transmissions, has expanded in recent years to include electric motor manufacturing and R&D. By partnering with a domestic SiC module developer, Volkswagen can reduce reliance on imported components, mitigate supply-chain risks, and better tailor its electric drivetrains to Chinese market requirements.
Founded in 2017, Leadrive Technology has quickly built a reputation for in-house power module design, motor controllers, and integrated power bricks. The company's approach—combining custom power semiconductor engineering with vertical integration of electronic controls—allows it to offer complete electrified propulsion solutions to global automakers. Its existing customer base includes several Chinese and international OEMs, and the Volkswagen deal marks a significant validation of its technology.
Neither party disclosed specific vehicle programs, investment figures, or a production timeline under the MoU. However, with Volkswagen's aggressive electrification targets for China—which include launching dozens of new EV models by 2030—the partnership is expected to accelerate. Industry observers note that the collaboration could eventually supply SiC modules for Volkswagen's MEB platform and upcoming SSP architecture.
The partnership also reflects a broader trend: automakers are moving beyond traditional Tier-1 supplier relationships and directly engaging with semiconductor specialists to secure critical components. As SiC capacity remains tight globally, such early-stage alliances can provide preferential access to advanced devices and packaging technologies.
Dr. Michael Bauer, a semiconductor analyst at Munich-based EV Research, commented: "Volkswagen's decision to co-develop SiC modules with a Chinese specialist like Leadrive is pragmatic. It gives VW faster access to application-specific modules while supporting its localization goals. The key will be whether the partnership can scale quickly enough to meet the automaker's production ramp."
With this MoU, Volkswagen and Leadrive are aligning their engineering resources to tackle the challenges of next-generation EV powertrains. The focus on SiC power modules, combined with a shared commitment to local development, positions both companies to play a pivotal role in China's rapidly evolving electric-vehicle ecosystem.
