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Volkswagen Partners with Xpeng to Accelerate EV Production

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Volkswagen Xpeng partnership

In an effort to expedite the introduction of electric vehicles (EVs) in China, Volkswagen has revealed plans to collaborate with local car manufacturer Xpeng. Announced on Wednesday, this long-term strategic alliance involves Volkswagen investing $700 million in Xpeng in exchange for a 4.99% equity stake and access to Xpeng’s cutting-edge technology, such as their EV platforms.

This development follows the recent announcement that SAIC, the largest automaker in China, will be partnering with Audi, a member of the Volkswagen Group. The partnership between Audi and SAIC entails a joint venture to produce Audi-branded EVs in China using SAIC’s platforms.

Similarly, the Volkswagen-Xpeng collaboration will result in jointly developed Volkswagen EVs for sale in China, utilizing Xpeng’s platforms. Volkswagen confirmed the launch of two mid-size models in early 2026, which will leverage the platform used in Xpeng’s G9 mid-size SUV—known as the SiC platform—introduced in 2021.

In the future, both Audi and Volkswagen plan to work with their respective Chinese partners to create next-generation EV platforms. The specifics of these impending platforms are yet to be decided.

The main objective of these partnerships, according to Audi and Volkswagen, is to rapidly penetrate new market segments by offering vehicles that appeal to Chinese customers. Despite both brands having a stronghold in the Chinese market for gasoline vehicles, they have faced challenges in taking advantage of China’s swiftly expanding EV market.

Multiple brands under the Volkswagen Group umbrella, including Audi and Volkswagen, have suffered setbacks due to a shortage of new EVs stemming from software-related delays. The combined EV sales of the Volkswagen Group in China totaled only 21,500 units in the first quarter of 2023, with just 3,000 of those being Audis. This pales in comparison to Tesla, which managed to sell 137,000 units during the same period.

In other news, Gernot Döllner was appointed the new CEO of Audi in June, following criticisms from Volkswagen Group CEO Oliver Blume about Audi’s performance, particularly in terms of delayed EV production and lackluster sales in China.

Frequently Asked Questions (FAQs) about Volkswagen Xpeng partnership

What is the purpose of Volkswagen’s partnership with Xpeng?

The partnership between Volkswagen and Xpeng aims to accelerate the launch of electric vehicles in China. This strategic collaboration involves Volkswagen investing $700 million in Xpeng for a 4.99% stake in the company and access to Xpeng’s technology, including its EV platforms.

Who is SAIC and what is their connection to the Volkswagen Group?

SAIC is China’s largest automaker, and they have recently announced a partnership with Audi, which is a brand under the Volkswagen Group. This collaboration will involve the two automakers jointly developing Audi-branded electric vehicles for sale in China, using SAIC’s platforms.

What are Volkswagen’s future plans regarding EV platforms?

Both Audi and Volkswagen plan to jointly develop next-generation EV platforms with their respective Chinese partners, SAIC and Xpeng. The specifics of these future platforms are still being negotiated.

How has the Volkswagen Group been performing in terms of EV sales in China?

The Volkswagen Group, including brands like Audi and Volkswagen, has faced challenges in the Chinese EV market. In the first quarter of 2023, their combined EV sales in China were just 21,500 units, with only 3,000 of those being Audis.

Who is the new CEO of Audi and why was he appointed?

Gernot Döllner was appointed the new CEO of Audi in June 2023, following criticisms from Volkswagen Group CEO Oliver Blume about Audi’s performance, including its EV production delays and poor sales in China.

More about Volkswagen Xpeng partnership

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5 comments

RobotsInCars July 28, 2023 - 4:04 am

What’s with all these partnerships these days… seems everyone’s got to buddy up to keep up. Not complaining tho, the more competition, the better for us consumers!

Reply
NoGasGus July 28, 2023 - 4:17 am

Just 3k Audis sold, that’s really sad. VW needs to step it up. Tesla’s cleaning up big time. They gotta shake things up with this deal. I’m just saying…

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BeijingBetty July 28, 2023 - 11:34 am

been following Xpeng for a while now, they’ve got solid tech. Good move for Volkswagen. the EV scene in China is super competitive but with Xpeng on their side, they might just make it.

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TommyTech123 July 28, 2023 - 2:05 pm

wow, that’s a big move for VW! They’re really pushing into China’s EV market. Can’t wait to see the results, fingers crossed they do better than with their own EVs…

Reply
Electric4Life July 28, 2023 - 7:53 pm

So, they are investing 700 million to get 4.99% of Xpeng and access to their tech?! Hope that investment pays off, and fast. The EV market is no joke and its getting crowded every day.

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