Ready for next EV push: Volkswagen enters into agreement with XPENG for fast joint development of two smart e-cars

Visual outline from an e-car
  • Major milestone reached: Partners enter into Master Agreement on strategic technical collaboration, bundling their respective strengths to tackle the dynamic Chinese market
  • Joint development of intelligent connected vehicles (ICV) will complement the Volkswagen brand portfolio with two models in the mid-size segment for the Chinese market
  • Partnership strengthens Volkswagen Group’s ‘In China, for China’ approach to efficiently cater to the needs of Chinese customers and tap new market segments
  • Timeline approved: first two models shall hit the road in 2026 – collaboration in development significantly reduces time to market by more than 30 percent
  • Joint Sourcing Program to optimize cost structures for both parties

Beijing. Volkswagen Group is consistently driving its e-offensive in China for China. Volkswagen and XPENG have entered into a Master Agreement on platform and software collaboration, marking a significant milestone in their strategic partnership. In December 2023, Volkswagen completed the acquisition of shares amounting to around 4.99 per cent of the total issued and outstanding share capital of XPENG, at that time following the announcement of the partnership in July. The Master Agreement centres on the initial joint development of two mid-size Volkswagen brand vehicles, which will launch first with a SUV. This will enable the VW brand to expand its existing portfolio quickly, to reach new target customer groups in the fast-growing EV market in China. The two jointly developed e-models will be equipped with state-of-the-art software and hardware, offering Chinese customers an intuitive, connected digital experience and advanced automated driving functions. All parties are contributing their respective core competences to the joint development work.

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