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Volkswagen acquires 5% of Xpeng in EV collaboration

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Volkswagen and Chinese EV startup Xpeng Motors are to jointly develop two EVs for the Chinese market. The VW-branded cars are scheduled for delivery in 2026.

As part of the agreement, Volkswagen will invest US$700 million (5 billion yuan) in a 5-percent stake in Xpeng and a seat on the board.

XPENG stock rose 40 percent on the news, reaching its highest level in a year.

Volkswagen aims to swiftly introduce products for Chinese customers while optimizing development and procurement costs.

In today’s EV market, Chinese companies have a clear lead in technology and expertise, while the competitiveness of joint-venture brands has declined.

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