In a significant move, Chinese electric vehicle (EV) maker Xpeng Inc XPEV and German auto giant Volkswagen AG VWAGY have announced a partnership to expedite the development of a new EV architecture.
What Happened: As per a Reuters report on Sunday, Xpeng and Volkswagen have set up project houses in Guangzhou and Hefei, China. These will serve as joint workspaces for engineers from both companies to fast-track the creation of a new EV architecture.
The collaboration aims to start production of the new architecture, a layout of electronic components, modules, and network within a vehicle, within two years. “From 2026, all electric vehicles of the Volkswagen brand in China will be equipped with this very powerful and efficient architecture,” stated Ralf Brandstätter, a board member of Volkswagen AG for China.
The project houses are part of a deal between Xpeng and Volkswagen, where the latter intends to use the new architecture to manufacture more affordable EVs in its largest market. This comes after a partnership formed last year when Volkswagen acquired a 4.99% stake in Xpeng for roughly $700 million, with plans to jointly launch two Volkswagen-branded EV models by 2026.
Why It Matters: This collaboration comes at a time when Chinese EV stocks, including Xpeng, are facing a downturn due to the Biden administration’s potential imposition of chip sale restrictions on China, escalating geopolitical tensions between the U.S. and China. As per a Benzinga report, XPEV stock has lost over 39% in the past year.
Furthermore, foreign automakers are struggling to compete in China’s rapidly growing EV market, despite new tariffs on Chinese EVs. According to a study by AlixPartners, foreign car companies are lagging in China’s EV market, which accounts for over 40% of new passenger cars sold in the country.
Check out more of Benzinga's Future Of Mobility coverage by following this link.
Read Next:
Photo courtesy: Shutterstock
This story was generated using Benzinga Neuro and edited by Shivdeep Dhaliwal
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
