XPeng, VW enter into master agreement on strategic technical collaboration

XPeng (XPEV) and Volkswagen (VWAGY) announced that, further to XPENG’s news releases dated July 26, 2023 and December 6, 2023 in connection with the Volkswagen’s share purchase of 4.99% shareholding in XPENG and the framework agreement on strategic technical collaboration, XPENG and the Volkswagen Group have entered into a Master Agreement on Platform and Software strategic technical collaboration, marking a significant milestone in the strategic partnership of both parties. The executed agreements not only accelerate the joint development of the two B-class battery electric vehicles but also pave the way for an extended and deeper strategic collaboration in the future. As part of the Master Agreement, both parties have also entered into a Joint Sourcing Program for the common parts of vehicles and platform that used by both parties. By sharing the scale of both parties combined and leveraging Volkswagen Group’s world-class supply chain, the Joint Sourcing Program will target to jointly reduce the cost of the platform, achieving significant synergies for the strategic partnership and competitiveness of the B-class BEVs being jointly developed. “The signing of the Master Agreement represents another significant milestone we achieved together with our partner Volkswagen Group. There is no precedent of the strategic partnership between Volkswagen and XPENG. However, the commitment by both companies and the trust built between our R&D teams over the past eight months have made the success of our project possible. Combining Volkswagen’s highly reputable vehicle development and engineering capability with XPENG’s Smart EV technologies, we will deliver the best smart EV products to Chinese consumers,” said Mr. Xiaopeng He, Chairman and CEO of XPENG. “With the long-term vision of our strategic partnership, both parties contribute their best to the partnership. We have started to realize synergies through our Joint Sourcing Program. I firmly believe there is a lot of upside potential to this partnership that we can explore.”