The Strategist

Volkswagen to pay €700M for 4.99 per cent stake in Chinese EV maker Xpeng

07/27/2023 - 03:27

The collaboration between the two businesses includes, among other, joint development of an electric sedan and a SUV for China's middle class.

German carmaker Volkswagen will to pay around €700 million for a 4.99% share in Chinese electric vehicle producer Xpeng to bolster its position in the Chinese electric vehicle market, writes Der Spiegel quoting to Ralf Brandstetter, Volkswagen’s CEO.

Volkswagen Group is partnering with Xpeng in order to stand out in China's very competitive electric car industry. Therefore, as part of the cooperation with Xpeng, which was established in 2014 and has already produced 124,000 electric vehicles, Volkswagen will pay around €700 million to buy a 4.99 percent ownership in the Chinese business. The cooperation between the two businesses includes, among other things, the joint development of two electric vehicle types for China's middle class: a sedan and an SUV. They are anticipated to go on sale in 2026.

Additionally, the future collaboration between SAIC, a Chinese manufacturer, and Volkswagen subsidiary Audi will be closer. The "in China for China" strategy includes local cooperation as a key component, said Brandstetter.