Volkswagen’s $700 Million Investment Boosts Xiaopeng Motors’ Stock Price by 40% in 40 Minutes
Volkswagen and Xpeng Motors Announce Joint Development of Two Electric Models Under Volkswagen Brand
Following Volkswagen’s announcement of a technical cooperation framework agreement with Xiaopeng Motors and an investment of $700 million in shares, Xiaopeng Motors’ US stock price surged significantly. As of the latest update, the U.S. stock price of Xiaopeng Motors stands at $21.69, marking a remarkable increase of 41.21%.
The agreement reveals that Volkswagen (China) Technology Co., Ltd. (VCTC) will become a development partner of Xiaopeng Motors. VCTC serves as a major R&D hub for the Volkswagen Group, consolidating R&D, innovation, and procurement functions outside of Wolfsburg.
The primary focus of the collaboration will be the medium-sized car market in China, with both companies working together to develop two electric models under the Volkswagen brand. These new vehicles will complement the existing product portfolio based on the MEB platform and are projected to enter the market by 2026.
As part of the long-term strategic partnership, the Volkswagen Group will increase its investment in Xpeng Motors by approximately $700 million, acquiring a 4.99% stake at a price of $15 per ADS (American depositary share, representing two Class A ordinary shares). Post-transaction, the Volkswagen Group will also secure an observer seat on Xpeng Motors’ board of directors.
Beyond this, the collaboration between Volkswagen and Xiaopeng Motors foresees joint development of a new localized platform for the next generation of intelligent networked vehicles (ICV) in the future.
Xiaopeng Motors has been at the forefront of technical innovation, pioneering urban intelligent driving assistance technologies among domestic car companies. Earlier this year, the company introduced the Fuyao architecture, featuring an 800-volt high-voltage silicon carbide platform as standard, CIB battery-body integration technology, and high-speed and urban intelligent assisted driving capabilities.
Contrasting with traditional European car companies, who have yet to adopt widespread technologies like 800V and central domain computing electrical architecture, Xiaopeng Motors has made significant strides in this area. European electric vehicles are often dominated by supplier splicing solutions, while Chinese electric vehicle manufacturers have achieved more advanced platform technology. Additionally, the cost and development time for electric cars in China are generally more efficient compared to Europe.
Apart from the Volkswagen-Xpeng partnership, numerous overseas car giants have embarked on deeper technical collaborations with Chinese car companies. Audi and SAIC Motor have signed a memorandum to enhance their existing cooperation, while Toyota and BYD have collaborated on the bZ3 model utilizing BYD’s three-electric system. Furthermore, Renault and Geely Automobiles have formed a close alliance, working together on internal combustion engines and model platforms, with Renault planning to introduce products based on Geely’s CMA platform in South Korea.