VW Group Expands In The Chinese EV Market with 5% Stake in XPeng

This strategic collaboration is part of the German automaker’s ambitious efforts to capitalize on the rapid growth of the Chinese e-mobility market.

In an unexpected move to strengthen its foothold in China’s electric vehicle landscape, Volkswagen Group has made a significant investment of $700 million, acquiring a 5% stake in the promising EV startup, XPeng.

As per the technological framework arrangement between Volkswagen and XPeng, both companies will join forces to co-develop two mid-size electric models under the VW brand, tailored exclusively for the Chinese market. Expected to hit the roads in 2026, these EVs will complement Volkswagen’s existing MEB product line-up, bolstering its electric offerings in China.

To cement their collaboration, Volkswagen is making a strategic investment of approximately $700 million in XPeng, gaining a 4.99% stake at $15 per ADS. The deal will see Volkswagen become a significant shareholder in XPeng through a capital increase, and it will also secure a position as an observer on XPeng’s board of directors.

He Xiaopeng, CEO of XPENG said “The Volkswagen Group and XPENG each brings in highly complementary strengths into this long-term strategic partnership. We will share Smart EV technologies and world-class design and engineering capability with each other and learn from each other. We are excited about the opportunity to contribute our expertise to the strategic partnership and create value for XPENG and our shareholders.”

Alongside the XPeng deal, Volkswagen Group has divulged further insights into its cooperation agreement with Audi and SAIC. The primary goal of these partnerships is to swiftly penetrate new customer and market segments, leveraging the immense potential of China’s flourishing electric mobility sector.

“Following on from the first two successful years of cooperation, we are now strengthening our long-term commitment to SAIC. Our aim is to jointly develop next-generation premium ICV swiftly and efficiently ‘in China for China.’ Even closer cooperation with a local partner such as SAIC supports Audi’s ambition to create a premium market segment for all-electric and fully connected cars in China.” said Jürgen Rittersberger, AUDI AG.