The two companies have entered into a joint sourcing program for common components for the vehicles and platforms used by both companies.
Xpeng and Volkswagen have entered into a master agreement on platform and software strategic technical collaboration, marking an important milestone in their strategic partnership.
The signed agreement not only accelerates the joint development of two B-class pure electric vehicles, but also lays the foundation for broader and deeper strategic cooperation in the future, Xpeng said.
As part of the master agreement, the two companies have also entered into a joint sourcing program for common components for the vehicles and platforms used by both companies.
By sharing the scale of both parties combined and leveraging Volkswagen Group's world-class supply chain, the Joint Sourcing Program will target to jointly reduce the cost of the platform, achieving significant synergies for the strategic partnership and competitiveness of the B-class BEVs being jointly developed.
Below is its press release, as the CnEVPost article is being updated.
XPENG and the Volkswagen Group Announce Entry into Master Agreement on Strategic Technical Collaboration and Joint Sourcing Program
XPeng Inc. (" XPENG," NYSE: XPEV and HKEX: 9868), a leading Chinese smart electric vehicle ("Smart EV") company and the Volkswagen Group, one of the world's leading automobile manufacturers, are pleased to announce today that, further to XPENG's news releases dated July 26, 2023 and December 6, 2023 in connection with the Volkswagen's share purchase of 4.99% shareholding in XPENG and the framework agreement on strategic technical collaboration, XPENG and the Volkswagen Group have entered into a Master Agreement on Platform and Software strategic technical collaboration ("Master Agreement"), marking a significant milestone in the strategic partnership of both parties.
The executed agreements not only accelerate the joint development of the two B-class battery electric vehicles but also pave the way for an extended and deeper strategic collaboration in the future.
As part of the Master Agreement, both parties have also entered into a Joint Sourcing Program for the common parts of vehicles and platform that used by both parties.
By sharing the scale of both parties combined and leveraging Volkswagen Group's world-class supply chain, the Joint Sourcing Program will target to jointly reduce the cost of the platform, achieving significant synergies for the strategic partnership and competitiveness of the B-class BEVs being jointly developed.
"The signing of the Master Agreement represents another significant milestone we achieved together with our partner Volkswagen Group. There is no precedent of the strategic partnership between Volkswagen and XPENG. However, the commitment by both companies and the trust built between our R&D teams over the past eight months have made the success of our project possible. 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 Mr. Xiaopeng He, Chairman and CEO of XPENG.
"With the long-term vision of our strategic partnership, both parties contribute their best to the partnership. We have started to realize synergies through our Joint Sourcing Program. I firmly believe there is a lot of upside potential to this partnership that we can explore."
Ralf Brandstätter, Board Member of Volkswagen AG for China: "In the world's largest and fastest-growing EV market, speed is fundamental when it comes to tapping into promising market segments. To constantly increase our local portfolio, we are expanding our own development capacities in China. Thereby, consistently following our strong "in China, for China" approach focusing on the specific needs of the Chinese customers. Through the partnership with XPENG, we are not only accelerating development times, but also boosting efficiency and optimizing cost structures. This increases the competitiveness in a highly price sensitive market environment significantly."
Brandstätter added: "The fast finalisation of the Master Agreement after the strategic partnership announcement last year already shows the great potential of this collaboration. The two teams are working closely together with a clear goal: to combine the strengths of both parties to bring smart products onto the road for our customers."