Xpeng Inc will deepen its cooperation with Volkswagen AG, with both companies pledging to develop a new electrical and electronic solution for all battery-powered cars made in China under the VW brand.
New Technical Collaboration Agreement
The Chinese electric vehicle (EV) maker announced on Monday that it has entered into a technical collaboration agreement with Volkswagen to develop solutions for locally made vehicles. These solutions will be based on VW’s China Main platform and Modular Electric Drive Matrix (MEB) platform.
Joint Project Houses
To facilitate this collaboration, Xpeng and Volkswagen have established project houses in Guangzhou and Hefei. These locations are where Xpeng and VW’s technology hub in China are respectively based, enabling engineers from both automakers to work closely together. The first car equipped with the jointly developed architecture is expected to start production within approximately 24 months.
Deepening Ties
This announcement further strengthens the existing ties between Xpeng and Volkswagen. In July last year, Volkswagen announced a $700 million investment in Xpeng in return for a 4.99% stake in the company. Volkswagen also holds an observer board seat and both automakers aim to develop at least two new VW-badged battery-powered models.
Strategic Benefits for Both Companies
For Volkswagen, partnering with Xpeng provides access to valuable smart-car software, an area in which the German automaker has struggled to develop independently. For Xpeng, the collaboration offers financial support and the opportunity to expand its global presence.
Future Prospects
With this new agreement, Volkswagen will launch a powerful new electronic vehicle system in the market from 2026, according to Ralf Brandstatter, a member of the board of management for Volkswagen in China. The collaboration is also expected to increase cost efficiencies.
Xpeng Chairman and CEO He Xiaopeng highlighted the significance of the agreement, stating, “The collaboration marks the third major milestone we achieved within a year in our long-term strategic partnership with Volkswagen.”
This strengthened partnership between Xpeng and Volkswagen signals a significant step forward in the development of advanced electric vehicle solutions tailored for the Chinese market, benefiting both companies and paving the way for innovative future mobility solutions.