Volkswagen to invest $700M in XPeng, jointly develop EVs in China

The Volkswagen Group (VWAGY) said it is “strengthening its position on the Chinese automotive market” with cooperations between the VW brand and XPENG (XPEV) and between Audi and SAIC. “The Group is thus forging ahead with its local electrification strategy. The aim is to swiftly tap into new customer and market segments, thereby systematically leveraging the potential of China’s dynamically growing e-mobility market,” VW stated. “The VW brand has concluded a technological framework agreement with XPENG. The initial stage of the cooperation shall provide for the joint development of two VW brand electric models for the mid-size segment in the Chinese market. The China-specific vehicles will supplement the MEB product portfolio and are to be rolled out in 2026 in China. This is subject to the conclusion of final agreements. As part of the close and long-term strategic cooperation, the Volkswagen Group is to invest approximately US $700Min the Chinese manufacturer of intelligent electric cars. Volkswagen is thus acquiring 4.99% stake in XPENG at US $15 per ADS by way of a capital increase, and will hold a seat as an observer on the XPENG board of directors. The share issuance will be subject to customary closing conditions including applicable regulatory approvals. Audi has signed a strategic memorandum with its Chinese joint venture partner SAIC to further expand existing cooperation. Joint development activities are to 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,” VW said.