In a significant move to strengthen its foothold in the Chinese automotive market, the Volkswagen Group has announced strategic partnerships with XPENG and SAIC. The collaborations aim to accelerate the Group's local electrification strategy and tap into new customer and market segments in China's rapidly expanding e-mobility market.
The VW brand has inked a technological framework agreement with XPENG, a leading manufacturer of intelligent electric cars in China. The initial phase of the cooperation will focus on the joint development of two VW brand electric models for the mid-size segment in the Chinese market. These China-specific vehicles, set to roll out in 2026, will supplement the MEB product portfolio. The Volkswagen Group is also investing approximately US$700 million in XPENG, acquiring a 4.99 percent stake at US$15 per ADS by way of a capital increase.
Ralf Brandstätter, Volkswagen AG Board Member for China, commented, "Local partnerships are an important building block in the Volkswagen Group's 'in China for China' strategy. We are now accelerating the expansion of our local electric portfolio and at the same time preparing for the next innovation step. With XPENG, we now have another strong partner that is one of the leading manufacturers in China in key technology areas."
Audi, another brand under the Volkswagen Group, has signed a strategic memorandum with its Chinese joint venture partner SAIC. The partnership aims to swiftly and efficiently extend the portfolio of fully connected electric vehicles in the premium segment. The jointly developed e-models will be equipped with state-of-the-art software and hardware to offer Chinese customers an intuitive, connected digital experience.
The Volkswagen Group's recent partnerships are part of its "in China for China" strategy, which aims to address market-defining trends in China at an early stage and leverage the growth dynamics and innovative strength of the Chinese market more effectively. The Group is expanding its Hefei plant in east China's Anhui Province into a state-of-the-art production, development, and innovation hub.
The Volkswagen Group China Technology Company (VCTC), the Group's largest development location outside Wolfsburg, is the development partner for XPENG. Over 2,000 development and procurement experts will work on new intelligent, fully connected electric vehicles at VCTC.
The partnerships aim to swiftly expand the Group's product range with further models from China for China in particularly promising customer and market segments. The details of cooperation on future e-platforms are the subject of further negotiations between the partners.
