Chinese Smart Electric Vehicle company XPeng Inc. (NYSE:XPEV) inked a pact with Volkswagen AG (OTC:VWAGY) to accelerate the joint development of the two B-class battery electric vehicles and pave the way for an extended and deeper strategic collaboration in the future.
The latest development follows XPeng's news releases dated July 26, 2023, and December 6, 2023, in connection with Volkswagen's share purchase of 4.99% shareholding in XPENG and the framework agreement on strategic technical collaboration.
As stipulated in the Master Agreement, both parties have engaged in a Joint Sourcing Program aimed at procuring common vehicle parts and platform components.
Through harnessing the combined scale of both entities and capitalizing on Volkswagen Group's supply chain infrastructure, the Joint Sourcing Program seeks to collaboratively drive down platform costs.
This initiative aims to yield substantial synergies for the strategic partnership and enhance the competitiveness of the jointly developed B-class BEVs.
"Combining Volkswagen's highly reputable vehicle development and engineering capability with XPENG's Smart EV technologies, we will deliver the best smart EV products to Chinese consumers," said Xiaopeng He, Chairman and CEO of XPENG.
To expand its international footprint, the Tesla, Inc.'s (NASDAQ:TSLA) Chinese rival established a long-term strategic partnership with Ali & Sons, a prominent automotive dealership group in the United Arab Emirates (UAE).
The partnership will see XPeng, alongside its new partners from strategic markets, introducing its latest Smart EV models to local consumers, XPeng announced on Thursday. The strategic markets include Egypt, Azerbaijan, Jordan, and Lebanon.
Price Action: XPEV shares traded higher by 3.67% to $9.05 premarket Thursday.
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