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21-08-2023 | Companies + Institutions | Editor´s Pick | News

Volkswagen to Develop Electric Cars for China with Xpeng

Author: Christiane Köllner

1:30 min reading time

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The Volkswagen Group is strengthening its position in the Chinese automotive market. To this end, VW is buying just under 5 % of the Chinese start-up Xpeng, and Audi is strengthening its cooperation with SAIC.

The VW brand has signed a technological framework agreement with Xpeng, according to the Volkswagen Group. As part of the cooperation, the Volkswagen Group plans to invest around $700 million in the Chinese electric vehicle manufacturer. Volkswagen will acquire U.S. depositary shares of China's Xpeng for $15 each, giving it a 4.99% stake in the e-car manufacturer. Volkswagen will also have an observer seat on Xpeng's board of directors. The relevant authorities still have to give their approval.

The cooperation initially involves the joint development of two electric models of the VW brand for the mid-size segment. The China-specific vehicles will complement the MEB product portfolio and are scheduled for launch in the Chinese market in 2026. This is subject to the conclusion of detailed agreements.

Audi Expands Cooperation with SAIC

Volkswagen subsidiary Audi is also expanding its cooperation with its Chinese joint venture partner SAIC. A strategic memorandum has been agreed for this purpose. Joint development work is intended to expand the range of electric vehicles in the premium segment. The plan is to start with electric models in a segment in which Audi is not yet represented in China.

Both agreements each also include a planned future joint development of new local platforms for the next generation of intelligent, fully connected electric vehicles (ICVs). They are intended to "to swiftly expand the Group’s product range with further models from China for China in particularly promising customer and market segments", according to Volkswagen. The details of the collaboration for future e-platforms are subject to further negotiations between the partners. The development partner for Xpeng is the recently founded Volkswagen Group China Technology Company (VCTC).

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