On February 29th, Xiaopeng Motors and Volkswagen Group signed a platform and software strategic technology cooperation joint development agreement (hereinafter referred to as the "Joint Development Agreement"), which will accelerate the joint research and development of two B-class pure electric vehicles.
As an important component of the joint development agreement, Xiaopeng Motors and Volkswagen have also entered into a joint procurement plan for the shared components of their vehicle models and platforms. By integrating their scale advantages and relying on Volkswagen Group's world-class supply chain capabilities, they work together to reduce platform costs, leverage the synergistic effect of strategic cooperation, and enhance the product competitiveness of the B-class pure electric vehicle models jointly developed by both parties.
Xiaopeng stated that this is the first time that both parties have signed a joint development agreement for platform and software strategic technology cooperation after the framework agreement; Thanks to the scale advantages of both parties and the world-class supply chain capabilities of Volkswagen Group, the dual wheel drive of Xiaopeng's "intelligent driving" and "system" capabilities will greatly reduce the platform cost of the vehicle model and enhance the product competitiveness of the B-class pure electric vehicle jointly developed by both parties.
On the evening of July 26, 2023, Volkswagen Group announced that the Volkswagen brand had reached a technical framework agreement with Xiaopeng Motors. In the initial stage of cooperation, both parties plan to jointly develop two electric models under the Volkswagen brand for the mid size car market in China.
As part of its strategic partnership, Volkswagen Group will increase its capital by approximately $700 million to acquire approximately 4.99% of Xiaopeng Motors at a price of $15 per ADS (American Depositary Stock, each ADS represents two Class A common shares). On December 6th last year, the above-mentioned investment was completed and delivered.
In the past few years, Xiaopeng Motors has been committed to creating technology labels and is one of the earliest domestic car companies to apply urban intelligent driving assistance. In 2023, Xiaopeng Motors released the Fuyao architecture, which is equipped with an 800V high-voltage silicon carbide platform as standard. It adopts CIB battery body integration technology and has high-speed and urban intelligent driving assistance capabilities.
Recently, Xiaopeng Motors stated that it will further increase its research and development efforts, recruit about 4000 people this year, and invest more than 40% of its research and development budget year-on-year; It is expected that the annual R&D investment in AI technology with intelligent driving as the core will be a total of 3.5 billion yuan.
In contrast, Volkswagen has shortcomings in areas such as electrical architecture, intelligent driving software, and intelligent cockpit software. Previously, when Volkswagen launched the MEB platform, it was repeatedly delayed due to software development issues. Some insiders also indicated that subsequent platform architectures such as Volkswagen PPE and SSP may also be delayed due to software impact.
In addition to announcing a joint development agreement with Xiaopeng, Volkswagen has also recently made personnel adjustments to its software company Cariad China. On February 28th, Volkswagen Group announced that starting from March 1st, 2024, Mr. Han Sanchu, former Chief Technology Officer and Chief Software Architect of Changan Technology, will take over as the CEO of CARIAD China from Mr. Chang Qing. He will also join the management board of Volkswagen Group (China) and serve as the Executive Vice President of the Group (China).
Ralf Brandsttter, Director of Volkswagen Group China, said, "China is the world's largest and fastest-growing electric vehicle market. To explore highly promising niche markets and gain a leading advantage, speed is crucial.". We firmly implement the 'In China, for China' strategy, with the aim of meeting the unique needs of Chinese customers, continuously expanding our local product portfolio, and continuously improving our research and development capabilities. Through cooperation with Xiaopeng Motors, we will shorten the product development cycle, improve efficiency, and optimize the cost structure. In a highly price sensitive market environment, this will significantly enhance the product's economic competitiveness