Volkswagen to invest P38.5 billion in Xpeng for EV expansion in China

Volkswagen Group is looking to strengthen its electric vehicle (EV) presence in China by collaborating with Xpeng.

Volkswagen wants to expand its EV portfolio in China with Xpeng

The German automaker is to invest approximately $700 million (around Php 38.5 billion) in Xpeng and its intelligent electric cars. In turn, Volkswagen will acquire a 4.99 percent stake in the Chinese automaker.

Xpeng is a Chinese EV startup founded in 2014. Boasting next-gen technologies such as autonomous driving, Xpeng is offering all-electric sedans and crossovers including the P7, G9, and P5.

“The VW brand has a long-term electrification strategy for the Chinese market. In doing so, we continue to consistently rely on our high-performance MEB and SSP architectures. With the strong growth of the electric segment, there are now further market opportunities that we want to exploit,” said VW Brand Region China CEO Stefan Mecha.

The automaker has formed the Volkswagen Group China Technology Company (VCTC) to become the dedicated development partner for Xpeng. The partnership aims to develop new local platforms for the next generation of “intelligent, fully connected vehicles (ICV).”

This news follows the announcement that Audi and SAIC reach an agreement to develop EVs for the Chinese market. Under the agreement, the former secured the rights to the latter’s EV platform.

Xpeng P5

While no further details were disclosed, we can expect the partnership to develop EVs based on Audi’s “Sphere” concepts – activesphere, grandsphere, urbansphere, and skysphere.

The initial stage of Volkswagen and Xpeng’s alliance should see the joint development of the two VW brand electric models for the mid-size segment in China. These models are said to supplement the MEB product portfolio and be launched in 2026.

“The Volkswagen Group and Xpeng each brings in highly complementary strengths into this long-term strategic partnership. We will share Smart EV technologies and world-class design and engineering capability with each other and learn from each other,” said Xpeng Chairman and CEO He Xiaopeng.

Since Volkswagen Philippines imports cars from China, we could only hope to see some of the upcoming next-gen EV models arrive on our shores. Currently, the Philippine lineup consists of the T-Cross, Santana, Santana GTS, Lavida, Lamando, and Multivan Kombi.

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