Xpeng Motors Stock Surges 40% After Reaching Agreement with Volkswagen

On July 26, Volkswagen and Xpeng Motors reached a technological framework settlement. In the early stage of cooperation, the 2 events plan to collectively develop two Volkswagen model electrical fashions for the Chinese midsize automobile market. These two new vehicles unique to the Chinese market will complement the product portfolio primarily based on the MEB platform, which is deliberate to go to market in 2026.

As part of this shut and long-term strategic cooperation, the events concurrently entered right into a share buy settlement for the issuance of Class A abnormal shares about 4.99% of XPENG’s excellent share capital as of instantly after the closing to Volkswagen Group at US$15 per American depositary share, for a complete consideration of roughly US$700 million. After the transaction is accomplished, Volkswagen will achieve an observer seat on the Xpeng board.

In addition, Volkswagen Group revealed that the newly established Volkswagen (China) Technology Company (VCTC) will likely be a companion of Xpeng in improvement.

XPeng’s inventory surged nearly 40% in in the present day’s buying and selling, placing them on observe for the best shut since Aug. 22, 2022.

Ralf Brandstätter, Volkswagen AG Board Member for China, commented, “Local partnerships are a key building block in the Volkswagen Group’s ‘in China for China’ strategy. Together with XPENG, we are now forming a strong cooperation and speeding up the expansion of our local electric portfolio and at the same time preparing ourselves for the next step change in innovation. In an intensely competitive and dynamic market environment we are leveraging the partners’ core competences, thus creating synergies to bring additional products to market faster – aligned with the special wishes of Chinese customers. At the same time, we can significantly optimize development and procurement costs.”

“The Volkswagen Group and XPENG each brings in highly complementary strengths into this long-term strategic partnership. We will share Smart EV technologies and world-class design and engineering capability with each other and learn from each other,” mentioned Mr. Xiaopeng He, Chairman and CEO of XPENG. “Since the founding of XPENG, we have been developing full-stack technologies from EV platform to Connectivity and ADAS software in house. We are excited about the opportunity to contribute our expertise to the strategic partnership and create value for XPENG and our shareholders.”

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Meanwhile, Audi, beneath Volkswagen Group, signed a strategic memorandum with its Chinese three way partnership companion, SAIC Group, to additional deepen the present cooperation. The two events will broaden their high-end clever related electrical automobile portfolio quickly and effectively via joint improvement. As step one of the plan, Audi will enter beforehand uncovered segments in China by launching new electrical fashions.

Some imagine that the explanation for the consecutive cooperation of the 2 manufacturers is that the outcomes of Volkswagen Group’s electrification transformation aren’t important.

Volkswagen Group’s information reveals that within the first half of this 12 months, the group’s world pure electrical automobile deliveries elevated by 48% to 321,600 items, with the proportion in whole deliveries rising from 5.6% in the identical interval final 12 months to 7.4%. Among them, Volkswagen ID.4(together with ID.5) and Volkswagen ID.3 had been the best-selling pure electrical fashions within the Volkswagen Group within the first half of the 12 months, with gross sales of 101,200 items and 49,800 items respectively.

SEE ALSO: Volkswagen China Responds to Talks with Huawei Over the Use of Its Software

In specific market areas, the European market has develop into the principle marketplace for Volkswagen Group’s pure electrical automobile gross sales, with deliveries rising by 68% within the first half of the 12 months, reaching 217,100 items, accounting for 68% of Volkswagen Group’s pure electrical automobile whole gross sales. The progress price of Volkswagen Group’s pure electrical autos within the US market is 76%, reaching 29,800 items.

Contrastingly, within the Chinese market, the place demand for electrical vehicles is robust, the supply quantity of Volkswagen Group’s pure electrical vehicles truly fell by about 2% in comparison with the earlier 12 months, with solely 62,400 items, and China solely accounted for 19% of Volkswagen Group’s pure electrical automobile gross sales.

Some imagine that with increasingly more automakers minimize costs within the Chinese market, and the fast improvement of Chinese new vitality automobile manufacturers, the dominant place established by Volkswagen Group within the inner combustion engine period is threatened.

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