Volkswagen Acquires Chinese Electric Car Manufacturer Xpeng

Volkswagen is entering into a surprising partnership with Chinese electric car startup Xpeng and joint venture partner SAIC. Together, the first vehicles are to be sold in China as early as 2026.

Xpeng enables two new VW models

Volkswagen confirmed this in an announcement on the partnership. The Reuters news agency had previously reported on the car manufacturers’ agreement.

With Xpeng, Volkswagen will produce two models for the mid-size segment, both of which will bear the VW logo and will be offered exclusively for the Chinese market. Xpeng will primarily contribute know-how related to software and autonomous driving.

The two models are expected to be on the market as early as 2026. They will fill a gap in Volkswagen’s product range in China. China is currently an important market because it is growing rapidly, especially for so-called “New Energy Vehicles”. In this segment, Volkswagen is currently far behind local competitors and the US carmaker Tesla.

Market launch in two years

Due to the market situation in China, VW is under strong pressure from investors. The group now wants to invest around 700 million dollars in Xpeng and acquire a 4.99 percent stake in the company.

China boss Ralf Brandstätter explained some time ago that Volkswagen’s China strategy is based on cooperation with local players.

Xpeng is, therefore, a stroke of luck for VW, but only one of many local partners. Volkswagen also announced plans for further collaboration between its subsidiary Audi and Chinese heavyweight SAIC. However, not much has been revealed about this. It is assumed that they are working on a common platform.