To assist speed up the launch of electrical autos in China, Volkswagen mentioned on Wednesday it plans to accomplice with native automaker Xpeng.

The long-term strategic partnership will see VW make investments $700 million in Xpeng in return for a 4.99% stake within the firm in addition to entry to its expertise, together with EV platforms.

The announcement comes simply days after SAIC, China’s greatest automaker, mentioned it’s going to accomplice with fellow Volkswagen Group model Audi. The Audi and SAIC deal will see the automakers collectively develop Audi EVs on the market in China, based mostly on SAIC platforms.

Equally, the VW and Xpeng deal will see the automakers collectively develop VW EVs on the market in China, based mostly on Xpeng platforms. Two fashions within the mid-size section have been confirmed by VW for launch in early 2026. They may use the platform that debuted in 2021 in Xpeng’s G9 mid-size SUV, often called the SiC platform.

Xpeng SiC platform

Finally, Audi and VW plan to collectively develop next-generation EV platforms with their respective Chinese language companions. Specifics for these future platforms are nonetheless being negotiated.

Audi and VW mentioned the partnerships goal to “swiftly” faucet into new segments with autos suited to Chinese language consumers. Although each manufacturers have been dominant in China for gas-powered autos, they’ve struggled to capitalize on China’s quickly rising demand for EVs.

Varied VW Group manufacturers together with Audi and VW have been stricken by a scarcity of recent EVs because of delays associated to software program points. Mixed VW Group EV gross sales in China have been simply 21,500 items within the first quarter of 2023, of which simply 3,000 have been Audis. Compared, Tesla managed 137,000 items over the identical interval.

Audi in June additionally named Gernot Döllner as its new CEO after VW Group CEO Oliver Blume was vital of Audi’s efficiency, together with its EV delays and poor gross sales in China.