On February 29, Xpeng Motors announced on the Hong Kong Stock Exchange that it had signed a strategic technology cooperation joint development agreement and a joint procurement plan with Volkswagen Group. Volkswagen also announced that it has signed a technical cooperation agreement with Xpeng Motors for joint platform and software development. At the heart of the partnership is the joint development of two midsize cars under the Volkswagen brand, the first of which will be an SUV.
Volkswagen said that the cooperation between the two parties will give full play to their core strengths and jointly promote the research and development process. Under the agreement, the two electric models will be equipped with advanced hardware and software systems to meet the unique needs of the Chinese market. In December 2023, the Volkswagen Group completed the acquisition of 4.4 percent of the total issued and outstanding share capital of Xpeng MotorsThe acquisition of 99% further strengthens the relationship between the two parties.
In addition, the two companies plan to procure common vehicle and platform parts through a joint procurement program. The aim of this program is to create a cost advantage and make the mid-size intelligent connected vehicles jointly developed by the two companies more competitive. Through joint procurement and the application of innovative technologies in the vehicle design and engineering phases, the two companies expect to shorten the product development cycle by more than 30 percent. This means that the two collaborative models are expected to be brought to market in a shorter timeframe, providing consumers with more choice.
According to the agreement, the two mid-size connected models are expected to be officially launched in 2026. At that time, they will be an important result of the cooperation between Volkswagen and Xpeng Motors, bringing a new driving experience to Chinese consumers. At the same time, the cooperation will also support the competitive position of both parties in the global electric vehicle market.