Source: Wall Street News

$XPeng (XPEV.US)$US stocks opened up sharply today. Up to now, the increase has increased to over 40%. Earlier, media reports said that Volkswagen plans to invest 700 million US dollars in Xiaopeng Motor to jointly develop electric vehicles in China.

According to media reports on Wednesday, the Volkswagen Group announced that it will cooperate with Xiaopeng through the Volkswagen brand and signed a long-term cooperation technology framework agreement.

As part of a long-term strategic partnership,The Volkswagen Group will increase the capital of Xiaopeng Motor by about 700 million US dollars to buy about 4.99% of Xiaopeng Motor's shares at a price of 15 US dollars per American depository certificate.After the deal is completed, the Volkswagen Group will receive an observer seat on the board of directors of Xiaopeng Motor.The Volkswagen Group will also rank after He Xiaopeng and Alibaba to become the third largest shareholder of Xiaopeng Motor.

According to the technical framework agreement reached between the two sides, in the early stages of cooperation, the two sides will jointly develop two electric models under the Volkswagen brand for the Chinese mid-size car market, which are scheduled to be launched in 2026.

It is reported that the newly established Volkswagen (China) Technology Co., Ltd. (VCTC) is responsible for the development of new models under the Volkswagen brand and will become a partner of Xiaopeng Motor in the field of development.

In addition, the Volkswagen Group also announced that Audi and SAIC Motor have signed a strategic memorandum to further expand existing cooperation.

The deal will increase the number of Volkswagen partners in China to four.It marks a turning point for Chinese manufacturers to moving from learning from foreign partners to providing them with technical and design support.

At a time when Volkswagen and Xiaopeng are “holding hands”, they are trying to reverse the decline in sales in the most important markets.

Currently, Tesla and BYD are already far ahead in the Chinese market because they are better at producing electric vehicles that meet the preferences of Chinese consumers and have technology and software adapted to the local market. In the first half of this year, Volkswagen's electric vehicle sales in China declined, despite an overall increase of 20% in the Chinese market.

The data shows that the Chinese market is one of the most important markets for Volkswagen. Volkswagen's move is aimed at strengthening its competitiveness in the Chinese market to meet competitors' challenges. This is also one of the key steps taken by Volkswagen in advancing its electrification strategy. At the same time, this cooperation will also help Xiaopeng Motor enhance its manufacturing and technical capabilities and further enhance its market position.

Barred, the management director responsible for the Volkswagen Group's business in China, said:

“We are accelerating the expansion of our domestic electric vehicle product portfolio while preparing for the next innovative transformation. Joining hands with Xiaopeng Motor has given us another strong partner in key technical fields in China.”

He Xiaopeng, Chairman and CEO of Xiaopeng Motor said:

“Volkswagen Group and Xiaopeng Motor will share smart electric vehicle technology and world-class design and engineering capabilities, and learn from each other.”

Editor/jayden