By Greg Gao

(JW Insights) Aug 3 -- Volkswagen’s Jetta brand is in talks with Chinese EV maker Leapmotor(零跑汽车) regarding a potential collaboration, the Chinese finance media outlet Cailianshe reported on August 2, citing insider sources.

The sources have revealed that this partnership differs from Volkswagen’s previous technical collaboration with Xpeng Motors. Instead, Volkswagen may acquire and utilize a specific generation of Leapmotor’s platform technology for its brand Jetta.

An industry expert commented, “Currently, the organizational mechanisms and management processes of legacy automakers are not entirely compatible with the agile development of electric intelligent vehicles. On the other hand, completely EV self-developing from scratch can be time-consuming and resource-intensive, with the risk of potential failure. Therefore, for these car companies, acquisitions may be more cost-effective, and this trend could become prevalent in the industry.”

“Additionally, in recent years, with the support of capital and favorable government policies, China’s smart electric vehicle market has achieved significant growth. In this context, foreign investment and sharing of our market’s benefits is a natural occurrence,” the expert added.

On July 31, Leapmotor unveiled a new platform it developed in-house for making vehicles, which its chief executive said it wanted to license to other automakers.

Volkswagen has accelerated its electrification shift and stepped up efforts to collaborate with industry-leading EV enterprises. Therefore, the news of Volkswagen potentially acquiring a specific platform technology from Leapmotor seems plausible and feasible. 

Volkswagen’s official collaboration announcement with Xpeng was a significant move by the company to further its presence in the new energy vehicle sector and aligns with its “In China, For China” strategy. 

Ralf Brandstätter, Volkswagen AG board member for China, stated, “Joining forces with Xpeng Motors has given us another strong partner in China’s critical technology sector. In a fiercely competitive and dynamic market, combining the core competencies of our cooperative partners enables us to introduce new products that cater to the needs of Chinese customers more rapidly. Furthermore, we can optimize development and procurement costs for all parties involved.”

The German auto giant aims to jointly develop EVs on Xpeng's ‘Edward’ platform on which the Chinese startup's mid-sized luxury SUV G9 model was built.

The automotive industry is currently engaged in a fierce price war. Leapmotor has also utilized “price reductions” to attract customers. In the face of intense competition in the automotive market, the collaboration between Leapmotor and Volkswagen could bring new opportunities, one analyst pointed out.

CEO Zhu Jiangming recently told reporters that Leapmotor was in advanced talks with two foreign companies about such a partnership, including a new player in the electric vehicle segment, which could produce Leapmotor-developed models in overseas markets, reported Reuters.

Leapmotor recently achieved record-high sales with a total of 14,335 new vehicle deliveries in July. The C-Series accounted for over 12,000 units, representing approximately 85% of the total, with its mid-size electric crossover SUV C11 accounting for over 9,200 units.