In a significant move to boost their presence in the Chinese electric vehicle (EV) market, the Volkswagen Group and XPENG have entered into a comprehensive strategic collaboration. The collaboration includes a framework agreement for technical cooperation and a share purchase agreement for a strategic minority investment by Volkswagen. This groundbreaking deal represents an investment of approximately US$700 million, allowing Volkswagen to hold approximately 4.99 percent of XPENG’s shares.
The primary objective of this alliance is to jointly develop two B-class battery electric vehicle (BEV) models under the prestigious Volkswagen brand, which …
[10:33 pm, 29/07/2023] Hamzaa: Title: Volkswagen Group and XPENG Join Forces to Accelerate Electric Vehicle Innovation in China
Volkswagen Group and XPENG, two prominent players in the electric vehicle (EV) industry, have established a groundbreaking strategic partnership to bolster their presence in the rapidly expanding Chinese market. This comprehensive collaboration includes a framework agreement for technical cooperation and a share purchase agreement for Volkswagen’s strategic minority investment in XPENG. With an investment of approximately US$700 million, Volkswagen will acquire a 4.99 percent stake in XPENG, solidifying its commitment to the Chinese EV market.
The primary focus of this strategic alliance is to collaboratively develop two B-class battery electric vehicle (BEV) models, designed exclusively for the Chinese market and proudly bearing the iconic Volkswagen brand. By synergizing their core competencies, Volkswagen and XPENG aim to leverage the latter’s innovative G9 platform and expertise in Connectivity and Advanced Driver Assistance Systems (ADAS) software.
Headquartered in Guangzhou, China, XPENG boasts main offices in Beijing, Shanghai, Silicon Valley, San Diego, and Amsterdam. The company’s cutting-edge Smart EVs are manufactured primarily at its state-of-the-art facilities in Zhaoqing and Guangzhou, both located in Guangdong province.
Speaking about the partnership, Mr. Xiaopeng He, Chairman and CEO of XPENG, expressed his excitement, stating, “The collaboration with the Volkswagen Group is a match made in heaven, with each company bringing highly complementary strengths to the table. Through this long-term strategic partnership, we aim to share Smart EV technologies and world-class design and engineering capabilities, fostering a mutual learning environment. Since XPENG’s inception, we have been dedicated to the in-house development of full-stack technologies, from EV platforms to Connectivity and ADAS software. We are thrilled to contribute our expertise to this partnership and create substantial value for XPENG and our shareholders.”
Mr. Ralf Brandstätter, Volkswagen AG Board Member for China, emphasized the significance of local partnerships within the company’s overarching ‘in China for China’ strategy. The collaboration with XPENG allows Volkswagen to accelerate the expansion of its local electric portfolio while preparing for a new era of innovation in the Chinese EV market. Mr. Brandstätter remarked, “In a fiercely competitive and rapidly evolving market landscape, we are leveraging the unique core competencies of both companies, generating synergies that expedite the introduction of new products that align with the distinct preferences of Chinese customers. Simultaneously, we can significantly optimize development and procurement costs.”
Beyond the joint development of two B-class BEV models, the collaboration between Volkswagen and XPENG seeks to explore additional strategic cooperation in various domains. This includes mutual efforts in the research and development of future EV platforms, software technologies, and the optimization of the supply chain.
Anticipated to commence production in 2026, the two jointly-developed BEV models represent only the beginning of the partnership’s ambitious plans. XPENG’s technological prowess and localized market insights, combined with Volkswagen’s global legacy and vast resources, position the collaboration as a powerful force in the ever-evolving electric mobility sector.
As the world embraces sustainable transportation solutions, this strategic alliance embodies the joint commitment of two automotive giants to shape the future of electric mobility in China and beyond. By uniting their strengths, the Volkswagen Group and XPENG are poised to make a meaningful contribution to the ongoing global transition towards eco-friendly transportation.
