Xpeng
Volkswagen is investing in the Chinese electric car manufacturer.
(Photo: Bloomberg)
For the ramp-up of electric mobility in China, the Volkswagen Group will in future rely on a platform partnership with the Chinese electric car manufacturer Xpeng. This was announced by Europe’s largest carmaker on Wednesday. In an extraordinary meeting, the supervisory board gave the green light for the cooperation. Together with Xpeng, VW wants to develop two new electric models for the mid-range segment, which will be available exclusively in China from 2026.
In addition, the Supervisory Board cleared the way for cooperation between Audi and the Chinese manufacturer SAIC. In a strategic memorandum, it was agreed to further expand the existing cooperation, according to a corporate statement.
The plan is to start with electric models in a segment in which Audi is not yet represented in China. According to company circles, it should be in the electric sedans of the A3 and A4 series. The Handelsblatt reported on the cooperation on Friday.
Volkswagen is investing $700 million in Xpeng
Volkswagen is paying a lot for the cooperation with Xpeng. The group is investing around 700 million dollars in Xpeng and is thus acquiring around five percent of the shares in the company, which was founded in 2014.
The aim of the partnership is to accelerate the expansion of the local electric portfolio, says VW China board member Ralf Brandstätter. “With Xpeng, we now have another strong partner who is one of the leading manufacturers in China in important technology areas.”
The two new electric vehicles are being developed in Volkswagen’s new development center in Hefei. In the unit called “100%TechCo”, a team from Xpeng and VW will work on the new vehicles.
ID.7 from Volkswagen in Shanghai
The models from Wolfsburg have not been well received by Chinese customers so far.
(Photo: Reuters)
Volkswagen miscalculated in China. The current electric range is not popular with customers in the People’s Republic. Both technologically and in terms of price, the vehicles cannot keep up with the large number of Chinese competitors and the US car manufacturer Tesla.
Current insurance data shows that VW registered just 38,000 electric cars in China in the first half of the year. The market share is less than two percent. Chinese competitor BYD registered more than half a million battery electric vehicles in the same period.
With the current model portfolio, VW cannot participate in the strong electric growth in China. The new models in cooperation with Xpeng should therefore complement the models previously available in the country based on the company’s own MEB platform, i.e. the ID.3, ID.4 and ID.6.
The process shows how little Volkswagen has confidence in turning the tide in China with the self-developed MEB platform. According to internal documents available to the Handelsblatt, the Wolfsburg-based company sees a kind of “safety net” for MEB and the further development MEB+ in the Xpeng platform, until the uniform electrical platform SSP is introduced and replaces the previous technology.
More: Volkswagen is creating space in China to build electric cars