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Key learning points
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XPeng is partnering with Volkswagen to develop technology for the latter’s electric vehicles, which are produced in China.
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Production of the electrical/electronic architecture is expected to begin within two years.
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Volkswagen invested $700 million last year for a 4.99% stake in XPeng.
XPeng (XPEV) American depositary receipts (ADRs) rose Monday after the company announced it would jointly develop an electric/electronic (E/E) architecture with Volkswagen for the latter’s production. Electric vehicles (EVs) Made in China.
Under a framework agreement, engineers from both companies will work together on the “Project House” in Guangzhou and Hefei, China. Production is expected to start within two years.
VW invested $700 million in XPeng last year
The move follows a framework agreement between the two companies announced in April. Last July, Volkswagen invested $700 million for a 4.99% stake in XPeng.
“From 2026, all fully electric vehicles of the Volkswagen brand in China will be equipped with this very powerful and efficient architecture,” said Ralf Brandstätter, Member of the Board of Management of Volkswagen AG for China, adding that the collaboration with XPeng is part of Volkswagen’s “in China for China” strategy.
XPeng’s ADRs rose 6.4% to $9.00 at 2:41 p.m. ET on Monday, but are down nearly 40% so far this year.
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