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Volkswagen's R&D base in Hefei teams up with Xpeng to develop two mid-sized cars

Pub Date:2023-08-01 15:54 Source:english.anhuinews.com

On July 26, Volkswagen released information announcing that the Volkswagen and Xpeng Motors have reached an agreement on technical cooperation, and the two companies plan to develop two new models for the domestic mid-size car market. The newly established Volkswagen (China) Technology Co. Ltd. in Hefei will be Xpeng's partner in development.

China is the world's largest and most competitive market for new energy vehicles, with a fast pace of product updates and strict requirements for cost control. The performance in the Chinese market is crucial to the success of Volkswagen's electrification transition. Volkswagen has joined forces with Xpeng with the aim of rapidly expanding its product portfolio and opening up new customer segments for the Volkswagen brand through joint development projects with strong local manufacturers.

It is reported that the two new models that Volkswagen and Xpeng plan to develop together will be under the Volkswagen brand and are intended to enter the market in 2026. The exact content of the co-operation depends on the eventual conclusion of the agreement. Through joint development and sourcing, the two companies will realise significant synergy potential and cost advantages compared to current model programmes. As part of the strategic partnership, Volkswagen will invest an additional capital of approximately US$700 million in Xpeng Motors, acquiring approximately 4.99 percent stake of Xpeng Motors.

The newly established Volkswagen (China) Technology Co. Ltd. in Hefei will be Xpeng's partner in the development of new models for the Volkswagen brand. Volkswagen (China) Technology Co., Ltd. brings together research and development, innovation and purchasing functions and is the largest research and development site of the Volkswagen company outside of Wolfsburg. More than 2,000 research and development specialists will work on the new intelligent, internet-connected electric vehicle models here in the future.

Volkswagen's Managing Director in charge of business in China, Ralf Brandstätter, said that joining forces with Xpeng gives Volkswagen another strong partner in key technology areas in China, allowing it to bring new products to the market faster that meet the unique needs of Chinese customers, as well as optimising development and sourcing costs for the two companies. He Xiaopeng, chairman and chief executive officer of Xpeng Motors, said Volkswagen and Xpeng's strengths are highly complementary, and the two companies will share smart electric vehicle technology as well as design and engineering capabilities.

Source: Anhui Daily

Reported by Wang Guoliang

Edited and translated by Zheng Chen and Wang Xirui

Editor:Wang Xirui

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