Volkswagen to invest $700 million in China's XPeng
Volkswagen, one of the world's largest automobile manufacturers, 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 purchase a 4.99 percent stake in Xpeng. As part of 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 has expanded the partnership of another Chinese manufacturer, SAIC, and Audi for the production of luxury electric vehicles. The German automotive giant made two major investment decisions in the Chinese market. Volkswagen Group, which announced that it will invest approximately $700 million in Chinese electric vehicle manufacturer Xpeng, announced that with this investment, it will acquire a 4.99 percent stake in the company through a capital increase. VW aims to increase its market share in the Chinese automotive market with this agreement. The German automobile manufacturer plans to produce two different models of electric vehicles in partnership with XPeng for China. The new electric vehicles will be produced at VW's new development, innovation and supply center in Hefei, China, and the vehicles will be sold under the Volkswagen brand in China. Production of the models is expected to begin in 2026. VW announced that it will use software developed by Xpeng for autonomous driving in these vehicles. In another announcement from the German automaker, VW announced that its Audi brand has expanded its partnership with Chinese automotive company SAIC to produce luxury electric vehicles for the Chinese market. Both brands plan 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 be released to the market. Both deals come at a time when VW’s sales in China, one of its most important markets, are falling and electric vehicle leaders Tesla and BYD are gaining ground.