Caixin News Agency, July 22nd (Reporter Xu Hao) The cooperation between Xiaopeng Motors and Volkswagen Group has once again been upgraded. On July 22nd, Xiaopeng Motors announced on the Hong Kong Stock Exchange that it has signed a strategic cooperation and joint development agreement with Volkswagen Group on electronic and electrical architecture technology. Both parties will fully invest in developing industry-leading electronic and electrical architectures for Volkswagen's CMP and MEB platforms produced in China.
According to the agreement, both parties have established joint development project teams in Guangzhou and Hefei to accelerate the development process of electronic and electrical architecture. The first Volkswagen model equipped with the jointly developed electronic and electrical architecture is expected to be mass-produced within approximately 24 months. In addition, Xiaopeng stated that they will actively explore opportunities for further cooperation with Volkswagen Group to expand the application scope of the jointly developed electronic and electrical architecture.
The CEA architecture is a comprehensive technology solution specifically designed for the Chinese market, which will be applied to Volkswagen's domestically produced pure electric vehicles based on CMP and MEB platforms, "said Bernard, Managing Director of Volkswagen Group responsible for China's business and Chairman and CEO of Volkswagen Group (China).
The cooperation between Xiaopeng and Volkswagen began in 2023. On July 27th of that year, Volkswagen Group made a strategic minority equity investment in Xiaopeng Motors and signed a share purchase agreement. Both parties have agreed to jointly develop two Volkswagen electric vehicle models based on the Xiaopeng G9 platform, intelligent cockpit, and ADAS software, with a planned delivery date of 2026; On February 29, 2024, Xiaopeng and Volkswagen entered into a joint procurement plan for shared components of their vehicle models and platforms; On April 17, 2024, the two parties once again signed the CEA Electronic and Electrical Architecture Technology Strategic Cooperation Framework Agreement.
The strategic cooperation and joint development agreement on electronic and electrical architecture technology signed by both parties can be seen as the implementation of the framework agreement in April this year. At the same time, the joint development between the two parties has expanded from the CMP platform within the previous framework to the MEB platform covering more vehicle models. In the eyes of industry insiders, this means that Volkswagen fully recognizes the technical strength of Xiaopeng.
The CMP platform is an A-class car platform developed by Volkswagen Group in China specifically for Chinese customers, which will further enhance Volkswagen's competitiveness in the mainstream A-class entry-level car market in China. According to the plan, its first model will be launched in 2026; Starting from 2026, Volkswagen will rely on this platform to develop no less than 4 electric models for the compact entry-level market. The MEB platform was born in 2018 and is Volkswagen's first modular pure electric drive platform for the global market, with a wider range of vehicle models. According to Volkswagen's plan, more than 10 pure electric vehicles based on MEB and PPE platforms will be launched by the end of this year. In addition, Volkswagen currently plans to upgrade the MEB platform to the MEB+platform, and by 2027, over 20 pure electric vehicle models will be launched on both the CMP and MEB+platforms.
Despite having rich experience in platform based hardware, Volkswagen has repeatedly encountered obstacles in the process of intelligent electrification transformation - even though it has established CARIAD, which focuses on software research and development, it still makes slow progress in areas such as electronic and electrical architecture.
With the CEA electronic and electrical architecture, Xiaopeng Motors can leverage Volkswagen's entire electric vehicle platform in China, "an insider from Xiaopeng Motors analyzed to reporters.
According to the strategic cooperation agreement signed between Xiaopeng and Volkswagen, the new electronic and electrical architecture CEA is jointly developed by Volkswagen, CARIAD China, and Xiaopeng Motors. Compared to the current electronic and electrical architecture, CEA will bring significant advantages. Three highly integrated regional controllers will replace a large number of electronic control units - the number of control units in the bicycle will be significantly reduced by 30%, which will significantly reduce costs and the complexity of the operating system, while improving computational performance and safety. Thanks to an efficient central computing platform and powerful computing power, advanced autonomous driving assistance and other complex functions can be integrated into the architecture more quickly and conveniently, "explained Volkswagen.
For the public, the development of CEA architecture will achieve comprehensive localization and quickly meet customer needs. In the Chinese automotive market, models are updated every three years, architecture is upgraded every two years, and vehicles undergo OTA updates every month. Volkswagen China will also keep up with this pace, "said Baired.
For Xiaopeng, the revenue from collaborating with Volkswagen has begun to be reflected in financial reports. In the first quarter of 2024, Xiaopeng Motors' service and other revenue increased significantly by 93.1% year-on-year. During the first quarter earnings conference call, the management explained that it was mainly due to the technology research and development service revenue related to the platform and software strategic technology cooperation with Volkswagen Group recorded in the first quarter of 2024.
In the first quarter of 2024, the platform software revenue was over 100 million yuan. At the same time, the electronic and electrical architecture cooperation with Volkswagen will be included in the revenue starting from the second half of this year. At that time, the management of Xiaopeng Motors revealed the benefits brought by the strategic cooperation with Volkswagen in the current period. In the view of the management of Xiaopeng Motors, its cooperation with Volkswagen has created a very unique business model in the automotive industry, which will be beneficial for continuously improving Xiaopeng Motors' profit margin level.
As of press time, the Hong Kong stock of Xiaopeng Motors has risen more than 3% to HKD 33.6 per share.