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XPeng and Volkswagen Group Seal Master Agreement, Accelerating JV in Smart EVs

This Master Agreement builds upon previous agreements, including Volkswagen's acquisition of a 4.99 percent shareholding in XPeng and a framework agreement on strategic technical collaboration.

March 02, 2024. By Abha Rustagi

XPeng Inc., a Chinese smart electric vehicle (Smart EV) company and the Volkswagen Group have announced that the companies have entered into a Master Agreement on Platform and Software strategic technical collaboration, solidifying their commitment to joint development efforts.

This Master Agreement builds upon previous agreements, including Volkswagen's acquisition of a 4.99 percent shareholding in XPeng and a framework agreement on strategic technical collaboration. The collaboration aims to accelerate the development of B-class battery electric vehicles (BEVs) while fostering an extended and deeper strategic relationship between the two entities.

As part of the Master Agreement, XPeng and Volkswagen have initiated a Joint Sourcing Program for common vehicle parts and platform components. Leveraging the scale of both companies and Volkswagen's robust supply chain, the program seeks to reduce platform costs and achieve synergies for the strategic partnership's competitiveness.

Xiaopeng He, Chairman and CEO of XPeng, expressed optimism about the partnership, stating, “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 highly reputable vehicle development and engineering capability with XPENG's Smart EV technologies, we will deliver the best smart EV products to Chinese consumers.”

Ralf Brandstätter, a Board Member of Volkswagen AG for China, underscored the importance of speed and local relevance in tapping into China's burgeoning EV market. "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," he said.

The swift finalization of the Master Agreement reflects the potential and commitment of both parties to the collaboration. Brandstätter commended the collaborative efforts of the teams from XPeng and Volkswagen, noting their shared goal of delivering smart products tailored to customer needs.

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