One of Germany’s leading economists has suggested BYD could one day acquire Volkswagen, as Europe’s largest automaker continues a sweeping restructuring aimed at cutting costs and simplifying its operations.
The comments came during an interview with German newspaper Süddeutsche Zeitung, in which historian Niall Ferguson warned Europe has been too slow to respond to China’s strategy of heavily supporting its electric vehicle industry.
“Unless there’s radical change, I predict Europeans will be driving Chinese cars on a massive scale very soon,” Mr Ferguson said.
During the same discussion, Moritz Schularick, president of the Kiel Institute for the World Economy, argued Europe should use market access as leverage by allowing Chinese automakers to sell vehicles only if they also build them there.
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When asked about Volkswagen’s long-term future, Mr Schularick made a bold prediction.
“Volkswagen will probably be bought by a Chinese carmaker. BYD, for example,” he said.
There’s no indication BYD has approached Volkswagen or is pursuing an acquisition. However, the comments have reignited debate in Europe about the German giant’s future as it grapples with slowing sales in China, fierce competition from domestic brands, and the enormous cost of developing next-generation electric vehicles (EVs) and software.
Volkswagen is already undertaking one of the biggest restructures in its history, with the company considering cutting tens of thousands of jobs, closing plants, reducing production capacity, and selling non-core assets.
In April, Porsche – historically Volkswagen’s most profitable brand – announced it intended to sell its stake in Bugatti Rimac after orders fell 10 per cent and profit plunged 93 per cent year-on-year. Porsche’s share price has also more than halved since 2023.
Since then, reports from Europe have suggested Volkswagen advisers are exploring the sale or spin-off of other group brands, including Lamborghini and Ducati.
The automaker has also backed away from developing some key technologies entirely in-house following well-publicised struggles at its Cariad software division.
Instead, Volkswagen has invested billions in partnerships with US electric vehicle maker Rivian and Chinese automaker Xpeng, giving it access to next-generation software and electrical architectures while reducing development costs and time to market.
Reports have also suggested Volkswagen is considering using vehicle platforms and technologies developed for China more broadly, potentially allowing it to bring models developed with Xpeng to Europe for the first time.
Some analysts believe the restructuring could make Volkswagen more attractive to investors by simplifying its corporate structure and sharpening its focus on its core brands.
Despite Mr Schularick’s comments, a takeover by BYD remains purely speculative.
Any acquisition of one of Germany’s largest industrial companies by a Chinese automaker would almost certainly face intense political and regulatory scrutiny across Europe. It could also create significant hurdles in the United States, where restrictions on Chinese connected vehicle technology are becoming increasingly stringent.
BYD is now one of the world’s largest producers of plug-in hybrid and electric vehicles and has rapidly expanded across Europe, making it one of the few automakers with the financial scale to theoretically pursue such a deal.
For now, however, there is no evidence either company is considering a takeover.
Instead, Mr Schularick’s remarks highlight how dramatically the automotive landscape has shifted, with Chinese manufacturers increasingly viewed not just as competitors to Europe’s traditional carmakers, but as companies with the financial strength to reshape – and buy – the world’s biggest auto brands.
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