Dive Brief:
- China-based electric vehicle startup Xpeng and the Volkswagen Group have agreed to jointly develop an EV platform and software, the automakers announced Thursday.
- The automakers will jointly source common parts to lower costs for two China-specific midsize EVs, with the agreement giving Xpeng access to the Volkswagen Group’s global supply chain.
- The agreement may lead to further collaboration between Xpeng and the Volkswagen Group in the future, according to a press release.
Dive Insight:
In July of last year, the Volkswagen Group announced it was acquiring a 5% stake in Xpeng worth approximately $700 million to jointly develop EVs and boost its competitiveness in China.
Under the latest agreement, the Volkswagen brand will sell two B-segment EVs based on Xpeng’s G9 EV platform, with production expected to start in 2026. The vehicles will use Xpeng’s connectivity and advanced driver assistance system software.
“In the world's largest and fastest-growing EV market, speed is fundamental when it comes to tapping into promising market segments, said Ralf Brandstätter, Board Member of Volkswagen AG for China, in a press release. “The two teams are working closely together with a clear goal: to combine the strengths of both parties to bring smart products onto the road for our customers.”
China’s booming EV market remains highly competitive for automakers, with BYD overtaking Tesla as the top EV seller worldwide at the end of 2023.
Xpeng is headquartered in Guangzhou, China. The company mostly manufactures its EVs at its plants in Zhaoqing and Guangzhou, Guangdong province. Xpeng develops its core vehicle systems, including powertrain and electrical and electronic architecture, in-house.
