By Li Panpan
(JW Insights) Jul 27 -- German automaker Volkswagen announced investing $700 million in Chinese EV group Xpeng, partners with SAIC to build new models and potentially co-create platforms, as it attempts to secure more market share in China.
Volkswagen concluded a technological framework agreement with XPENG to invest approximately $700 million in it, acquiring a 4.99 percent stake in the Chinese company along with a seat as an observer on its board of directors. They will develop two VW brand electric models for the mid-size segment in the Chinese market to roll out in 2026, Volkswagen said on July 26.
Earlier, Volkswagen's subsidiary Audi also signed a strategic memorandum with its Chinese joint venture partner SAIC. They will extend the portfolio of fully connected electric vehicles on offer in the premium segment swiftly and efficiently. It is planned to start with electric models in a segment where Audi does not as yet have a presence in China.
The jointly developed e-models are to be equipped with state-of-the-art software and hardware in order to offer Chinese customers an intuitive, connected digital experience, said Volkswagen.
Both agreements also envisage a planned future joint development of new local platforms for the next generation of intelligent, fully connected vehicles (ICV).
The partnerships aim to swiftly expand Volkswagen’s product range with further models from China for China in particularly promising customer and market segments, said the company.
Ralf Brandstätter, Volkswagen AG board member for China, said: "Local partnerships are an important building block in the Volkswagen Group's 'in China for China' strategy. With XPENG, we now have another strong partner that is one of the leading manufacturers in China in key technology areas.”
He Xiaopeng, chairman and CEO of XPENG, said, “Volkswagen and XPENG each bring highly complementary strengths into this long-term strategic partnership. We will share Smart EV technologies and world-class design and engineering capability with each other and learn from each other. ”
Zu Sijie, SAIC's vice president and chief engineer, said, “SAIC and Audi will leverage the advantages of both sides to meet the needs of Chinese customers for premium electric intelligent connected vehicles.”
