Volkswagen, one of the world’s largest automakers, announced that it plans to invest $700 million in Chinese electric vehicle manufacturer XPeng. Aiming to increase its power in the Chinese market, the German automotive giant will buy 4.99 percent of Xpeng’s shares. Under the agreement, VW and XPeng will produce electric vehicles under the VW brand for the Chinese market. The German automotive group also announced that it is expanding the partnership between Audi and SAIC, another Chinese manufacturer for luxury electric vehicle production.
Two major investment decisions came from the German automotive giant in the Chinese market. Announcing that it will invest approximately $700 million in Chinese electric vehicle manufacturer Xpeng, Volkswagen Group announced that with this investment, it will acquire 4.99 percent of the company’s shares through capital increase. With this agreement, VW aims to increase its market share in the Chinese automotive market.
The German automaker plans to produce two different models of electric vehicles for China in partnership with XPeng. The new electric vehicles will be manufactured at VW’s new development, innovation and supply center in Hefei, China, and the vehicles will be sold in China under the Volkswagen brand. Production of the models is expected to begin in 2026. VW has announced that it will use software developed by Xpeng for autonomous driving in these vehicles.
In another announcement from the German automotive manufacturer, VW announced that the Audi brand is expanding its partnership with Chinese automotive company SAIC to produce luxury electric vehicles for the Chinese market. Both brands are planning to develop a new platform for luxury segment electric vehicle production. VW did not share any details about the financial size of the deal, including when these electric vehicles will hit the market.
Both deals come at a time when sales fell in China, one of VW’s most important markets, and electric vehicle leaders Tesla and BYD came to the fore.