XPENG, Volkswagen Enter Master Agreement On Joint Sourcing Programme

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XPeng, a Chinese smart electric (Smart EV) vehicle company, and the Volkswagen Group, an automobile manufacturer, recently entered into a master agreement on platform and software strategic technical collaboration. Under the master agreement, both parties have entered into a joint sourcing programme for the common parts of vehicles and platforms that are used by both parties.

By sharing the scale of both parties combined and leveraging Volkswagen Group’s supply chain, the joint sourcing program targets to reduce the cost of the platform, to achieve synergies for the strategic partnership and competitiveness of the B-class battery electric vehicle (BEVs) being jointly developed. This partnership aimed to further XPENG’s earlier initiatives The executed agreements not only accelerate the joint development of the two B-class battery electric vehicles but also pave the way for an extended and deeper strategic collaboration in the future.

“The signing of the Master Agreement represents another significant milestone we achieved together with our partner Volkswagen Group. There is no precedent of the strategic partnership between Volkswagen and XPENG. However, the commitment by both companies and the trust built between our R&D teams over the past eight months have made the success of our project possible. Combining Volkswagen’s vehicle development and engineering capability with XPENG’s Smart EV technologies, we will deliver the best smart EV products to Chinese consumers,” said Xiaopeng He, Chairman and CEO of XPENG. “With the long-term vision of our strategic partnership, both parties contribute their best to the partnership. We have started to realize synergies through our Joint Sourcing Program. I firmly believe there is a lot of upside potential to this partnership that we can explore.”

Ralf Brandstätter, Board Member of Volkswagen AG for China said, “In the world’s largest and fastest-growing EV market, speed is fundamental when it comes to tapping into promising market segments. To constantly increase our local portfolio, we are expanding our development capacities in China. Thereby, consistently following our strong “in China, for China” approach focusing on the specific needs of the Chinese customers. Through the partnership with XPENG, we are not only accelerating development times but also boosting efficiency and optimizing cost structures. This increases the competitiveness in a highly price sensitive market environment significantly.”

Brandstätter added, “The fast finalisation of the Master Agreement after the strategic partnership announcement last year already shows the great potential of this collaboration. The two teams are working closely together with a clear goal to combine the strengths of both parties to bring smart products onto the road for our customers.”