To assist speed up the launch of electrical automobiles in China, Volkswagen stated on Wednesday it plans to companion with native automaker Xpeng.

The long-term strategic partnership will see VW make investments $700 million in Xpeng in return for a 4.99% stake within the firm in addition to entry to its expertise, together with EV platforms.

The announcement comes simply days after SAIC, China’s largest automaker, stated it’ll companion with fellow Volkswagen Group model Audi. The Audi and SAIC deal will see the automakers collectively develop Audi EVs on the market in China, primarily based on SAIC platforms.

Equally, the VW and Xpeng deal will see the automakers collectively develop VW EVs on the market in China, primarily based on Xpeng platforms. Two fashions within the mid-size phase had been confirmed by VW for launch in early 2026. They are going to use the platform that debuted in 2021 in Xpeng’s G9 mid-size SUV, often called the SiC platform.

Xpeng SiC platform

Finally, Audi and VW plan to collectively develop next-generation EV platforms with their respective Chinese language companions. Specifics for these future platforms are nonetheless being negotiated.

Audi and VW stated the partnerships intention to “swiftly” faucet into new segments with automobiles suited to Chinese language consumers. Although each manufacturers have been dominant in China for gas-powered automobiles, they’ve struggled to capitalize on China’s quickly rising demand for EVs.

Varied VW Group manufacturers together with Audi and VW have been affected by an absence of recent EVs as a consequence of delays associated to software program points. Mixed VW Group EV gross sales in China had been simply 21,500 models within the first quarter of 2023, of which simply 3,000 had been Audis. Compared, Tesla managed 137,000 models over the identical interval.

Audi in June additionally named Gernot Döllner as its new CEO after VW Group CEO Oliver Blume was essential of Audi’s efficiency, together with its EV delays and poor gross sales in China.