Volkswagen’s namesake brand sold a record of more than 28,000 electric vehicles (EVs) and plug-in hybrids in China in October, nearly 350% more than a year earlier, the company said on Wednesday.

The automaker expects that momentum to last over the next several months and wants a place among China’s top 10 new energy vehicle (NEV) brands by sales next year. In this context, NEVs means EVs plus plug-in hybrids.

The automaker’s challenge is converting that sales record into a profitable group business in China. Fully electric vehicles accounted for 3.5% of group sales in China over nine months, Bloomberg reported, and Volkswagen Group disclosed that its China joint operations had become loss-making.

What drove the October surge?

New models powered the increase, with the ID. Aura T6 SUV and ID. Era 5S sedan among the contributors Bloomberg identified. Those models give Volkswagen products to sell as it pursues the top-10 goal next year.

Volkswagen expects the growth to persist over the next several months, the company said. It also intends to launch more than 20 new electrified models in China next year, according to Bloomberg, while aiming for a top-10 NEV ranking by sales.

The challenge is that Volkswagen is expanding its electric range into a contracting market. Reuters, citing data from the China Passenger Car Association, expects China’s passenger-car sales to decline 20% this year compared with last year.

What is Volkswagen’s product pipeline?

The company has set out two related, but differently framed, targets for its Chinese electric push:

• More than 20 new electrified models in China next year, according to Bloomberg.
• 30 NEV models in China through 2029, according to Reuters, citing Volkswagen China.

The first target supplies products for the immediate top-10 bid; the second sets the scale of the range through 2029. In both cases, the mechanism is the same: more models create more opportunities to sell NEVs in a market where overall passenger-car sales are falling 20% this year.

Where do Chinese partnerships fit?

To speed up its turnaround, Volkswagen has turned to Chinese partners, Bloomberg reported. Its collaboration with Xpeng resulted in a new electronic architecture, the underlying electronics and computing framework for its vehicles.

A separate software tie-up with Horizon Robotics brought autonomous-driving features. The two agreements cover different layers of the vehicle, placing technology partnerships alongside the more than 20 electrified models planned for China next year.

Can growth continue in a shrinking market?

Volkswagen’s near-term expectation is for the October sales rise to persist over the next several months. Its longer-term measure is a top-10 NEV ranking next year, with the model rollout and Chinese technology partnerships forming the stated plan.

The constraint is the market itself. Reuters expects Chinese passenger-car sales to fall 20% this year, based on China Passenger Car Association data, which leaves Volkswagen competing for share rather than benefiting from an expanding market.

Volkswagen also enters that contest with a small electric contribution at group level: fully electric vehicles made up 3.5% of group sales in China over nine months, according to Bloomberg. The group’s China joint operations have also moved into loss, a disclosure that gives the electrification strategy a financial test beyond unit sales.

The company’s own measure is clear: a top-10 NEV position next year. The obstacles are equally measurable: a 20% passenger-car contraction this year, an EV share still at 3.5%, and China joint operations already loss-making.