Volkswagen China is spending lots of time at Xpeng to make new EVs

cnbc.com:

BEIJING — Hundreds of Volkswagen staff are spending time at Xpeng as the German auto giant and Chinese startup work to create electric cars for China, Xpeng co-president Brian Gu told CNBC on Monday.

He also said the partnership will help Xpeng's global ambitions.

Volkswagen in July 2023 announced a $700 million investment into Xpeng to jointly develop two electric cars for delivery in China in 2026. The vehicles will be based on the platform for Xpeng's G9, a midsize electric crossover SUV.

The German company's workers are spending more time at Xpeng's offices than the startup's are at Volkswagen's, Gu said. They are learning about the startup's technology.

Xpeng's driver-assist technology is widely considered one of the best currently available in China. Tesla's version, marketed as «full self-driving,» isn't fully accessible in China.

The German automaker did not immediately respond to a request for comment.

Gu emphasized the forthcoming vehicles will be «very different» from those that currently sold by Xpeng or Volkswagen. He said the cars would likely have «better range, charging, much smarter driving, more feature luxury technology, for the same price, potentially.»

China is a key market for Volkswagen. The German automaker delivered 3.2 million cars in China last year, more than the 3.1 million in all of Western Europe.

But like many traditional foreign auto giants, Volkswagen has also struggled in China as the local market rapidly shifts towards battery-only and hybrid powered vehicles. The company's China deliveries plunged by 19.3% in the quarter ended June from a year ago.

While Xpeng saw second-quarter deliveries grow by 30% year-on-year to more than 30,200 vehicles, the startup lags behind many of its