VW and Xpeng ink partnership agreements

Firms agree on technical collaboration and to work jointly on components sourcing in China

VW and Xpeng ink partnership agreements
Xpeng and VW have collaborated since July 2023

Chinese OEM Xpeng and German automaker VW Group have agreed to collaborate on platform and software technology, as they work towards the joint development of two B-segment EVs as part of the partnership announced in July last year.

As well as the EVs – which will be jointly produced for the Chinese market and made under the VW brand – the firms say that the agreement "paves the way for an extended and deeper strategic collaboration in the future".

The upcoming BEVs, due for release in 2026, will be made in China and form part of VW's 'In China, for China' strategy as it aims to strengthen its market presence in the country. VW Group sold 191,800 EVs in China in 2023.

The collaboration will improve the speed to market of upcoming EV products, according to VW Group board member Ralf Brandstaetter.

"Through the partnership with Xpeng, we are not only accelerating development times, but also boosting efficiency and optimising cost structures. This increases the competitiveness in a highly price sensitive market environment significantly,” he says.

As part of the agreement, both parties have also entered into a joint sourcing scheme for vehicle and platform parts.

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"The joint sourcing programme will...reduce the cost of the platform, achieving significant synergies for the strategic partnership and competitiveness of the B-class BEVs being jointly developed," Xpeng says.

VW's collaboration with Xpeng began in July 2023, when it bought a 5pc stake in the Chinese firm. The JV is also looking to expand its international presence beyond the Chinese market, although it is not entirely clear if the firms are fully aligned on what the partnership might mean ex-China.

There is also continuing analyst frustration at VW's insistence that the two new BEVs being jointly developed on Xpeng's platform will be targeted solely at the Chinese domestic market and not sold internationally, such as in the German OEM's home European market.

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