Audi and SAIC's cooperation has landed, weighing heavily! Volkswagen invests $700 million in Xiaopeng Motors China | Market | Automotive
On the evening of July 26th, Volkswagen Group announced that the Volkswagen brand had reached a technical framework agreement with Xiaopeng Motors. In the initial stage of cooperation, both parties plan to jointly develop two electric models under the Volkswagen brand for the mid size car market in China. These two new cars, exclusively for the Chinese market, will supplement the product portfolio based on the MEB platform and are planned to enter the market in 2026. The relevant cooperation content depends on the final agreement reached.
As part of this close and long-term strategic partnership, Volkswagen Group will increase its capital by approximately $700 million to acquire approximately 4.99% equity of Xiaopeng Motors at a price of $15 per ADS. After the transaction is completed, Volkswagen Group will receive an observer seat on the board of directors of Xiaopeng Motors. The issuance of shares will depend on the achievement of customary delivery prerequisites, including applicable regulatory approvals.
In addition, Audi and its Chinese joint venture partner SAIC Group have signed a strategic memorandum to further deepen existing cooperation. Both parties will rapidly and efficiently expand the high-end market intelligent connected electric vehicle product portfolio through joint development. As the first step in planning, Audi will enter the previously untapped segmented market in China by launching a brand new electric vehicle model.
Volkswagen Group claims that both agreements envision the joint development of a new localized platform for the next generation of intelligent connected vehicles in the future. The partnership aims to rapidly expand the group's product lineup and create more "in China, for China" car models. The details of future cooperation on electric vehicle platforms will be further negotiated by the cooperating parties.
The newly established Volkswagen Technology Co., Ltd. will become a partner for Xiaopeng Motors in the development field. This technology company gathers research and development, innovation, and procurement functions, and is the largest research and development base of the Volkswagen Group except for Wolfsburg. In the future, over 2000 R&D and procurement experts will carry out related work on the new intelligent connected electric vehicle model here.
Compared to the current vehicle project, through joint development and procurement, both parties will achieve significant collaborative potential and cost advantages.
The relevant cooperation reflects the Volkswagen Group's "in China, for China" strategy. Based on this strategy, Volkswagen Group is committed to grasping the decisive trends in the Chinese market in the early stages of product development, and more efficiently utilizing the growth momentum and innovation strength of the Chinese market. To accelerate decision-making and development processes in China, Volkswagen Group is strengthening its local research and development capabilities in the fields of electric mobility, digitalization, and autonomous driving.
To this end, Volkswagen Group has established a highly modern production, research and development, and innovation base in Hefei, Anhui Province. Volkswagen Anhui will officially start production within this year. In addition, Volkswagen Parts Co., Ltd. has built a manufacturing factory for high-voltage battery systems in Hefei. Volkswagen Technologies has also established a research and procurement center for intelligent connected electric vehicles here.
Meanwhile, Volkswagen Group is focusing on cooperation with local high-tech enterprises in China. For Volkswagen Group, localized high-tech research and development, as well as systematic implementation of customer-oriented policies, are the key to playing a market leading role in the new era of intelligent connected vehicles.
Volkswagen stated that through cooperation between the Volkswagen brand and Xiaopeng Motors, Audi and SAIC Group, Volkswagen Group is strengthening its position in the Chinese automotive market and continuously promoting the development of its electrification strategy in China. Its goal is to quickly expand new customer groups and segmented markets to fully participate in the booming development of the Chinese electric vehicle market.