Volkswagen to purchase 4.99% of XPeng for $700M, enter pact to develop EVs

XPeng (XPEV) and Volkswagen (VWAGY) announced that Xpeng and the Volkswagen have entered into a framework agreement on strategic technical collaboration and a share purchase agreement for strategic minority investment by the Volkswagen Group in Xpeng. The parties simultaneously entered into a share purchase agreement for the issuance of Class A ordinary shares about 4.99% of Xpeng’s outstanding share capital as of immediately after the closing to Volkswagen Group at $15 per American depositary share, for a total consideration of approximately $700M. The share issuance will be subject to customary closing conditions including applicable regulatory approvals. In connection with the strategic technical collaboration, Xpeng and Volkswagen will jointly develop two B-class battery electric vehicles models for sale in the Chinese market under Volkswagen brand. The models are expected to start production in 2026. Furthermore, the parties will explore additional potential strategic cooperation in a number of areas, including collaboration on future EV platforms, software technologies and supply chain.