XPeng Motors: Details of Further Cooperation with Volkswagen Will Be Disclosed Next Week

Today, automotive industry insiders revealed on Weibo that hundreds of Volkswagen engineers have been stationed at the XPeng Motors headquarters in Guangzhou. This indicates a comprehensive upgrade in technical cooperation between Volkswagen and XPeng Motors. The insider cited sources as saying, ‘The scope of collaboration between the two parties is very wide, unprecedented in depth.’

However, this Weibo post was quickly deleted. XPeng Motors’ public relations department declined to comment on the relevant information, but stated that detailed news about further cooperation between Volkswagen and XPeng will be disclosed next week.

The cooperation between Volkswagen and XPeng Motors started a year ago. In July 2023, Volkswagen announced plans to invest $700 million in XPeng Motors. The two parties will jointly develop two B-class pure electric vehicle models based on their respective core competencies and XPeng Motors’ G9 platform, intelligent cockpit, and advanced driver assistance system software. These models will be sold under the Volkswagen brand in the Chinese market.

Subsequently, the cooperation between the two parties deepened further. On February 29, 2024, XPeng Motors and Volkswagen signed a joint development agreement on platform and software strategic technologies, establishing a joint procurement plan for shared components of vehicle models and platforms.

On April 17, 2024, XPeng Motors and Volkswagen jointly issued a statement that they will sign the latest strategic cooperation framework agreement on electronic-electrical architecture technology. Based on XPeng Motors’ latest generation EEA architecture, they will jointly develop a new electronic-electrical architecture platform. It is expected to be applied to Volkswagen brand electric vehicle models produced in China starting from 2026.

SEE ALSO: XPeng Motors and Volkswagen Sign A Strategic Cooperation Agreement on EEA

XPeng‘s EEA architecture has evolved to version 3.5, compared to the EEA 3.0 architecture, in addition to a 50% improvement in the domain control performance of the entire vehicle, it can also significantly reduce the controllers of various modules with the highest integration level, saving up to 40% of hardware costs. This is the most attractive feature for consumers.

XPeng Motors’ financial report for the first quarter of this year shows that thanks to cooperation with Volkswagen, XPeng Motors’ gross profit margin has reached double digits. In the first quarter of this year, XPeng‘s overall gross profit margin was 12.9%, compared to 1.7% in Q1 2023 and 6.2% in Q4 2023.

In the first quarter of 2024, platform software revenue was over 100 million yuan. At the performance meeting, XPeng Motors management revealed the current income brought by strategic cooperation with Volkswagen Group.