Volkswagen plans to invest $700 million in China’s Xpeng Motors and jointly develop electric vehicles in China, the German automaker announced on Wednesday.
The Volkswagen brand will partner with Xpeng to produce two models targeting the middle-class segment which will carry the VW logo but feature Xpeng know-how on software and autonomous driving, it said.
Xpeng Motors said announced that its wholly-owned subsidiary Guangdong Xiaopeng Motors and Volkswagen China have reached an agreement on strategic technical collaboration.
Xpeng will issue and allot to Volkswagen a maximum of 94.6667 million Class A ordinary shares, representing 4.99% of its enlarged share capital and the purchase price will be $15 per ADS, equivalent to HK$58.6 per Class A ordinary share, which represents a discount of approximately 3.1% to the closing price of HK$60.5 on Wednesday.
Xpeng and Volkswagen will jointly develop two B-class BEV models for sale in the Chinese market under Volkswagen brand, leveraging respective core competencies and XPENG’s G9 platform and Connectivity and ADAS software. The models are expected to start production in 2026.
Volkswagen will eventually hold a 4.99% stake in Xpeng via a capital increase and is getting an observer board seat, it said.
In addition, Volkswagen’s Audi premium brand will deepen its ties with China’s SAIC Motor, including jointly developing EV models and a new platform, it said, without specifying which models they would develop together and the schedule.
The models would be in a segment Audi has yet to broach in China, it said, as the premium brand plays catch-up in the Chinese electric vehicle market, where its performance has so far been weak.
Xpeng Motor is surging more than 30% in the US to hit $21.08 at one point, the highest level in nearly one year.
