XPeng (NYSE:XPEV) and Volkswagen (OTC:VWAGY) announced on Friday that they have deepened their partnership by expanding their E/E Architecture collaboration beyond electric vehicles to internal combustion engine (ICE) and plug-in hybrid (PHEV) platforms in China.
The move builds on their July 2024 master agreement and aims to accelerate Volkswagen's software-defined vehicle strategy, enabling faster software iterations, over-the-air updates, and shorter development cycles.
Joint R&D teams validated that the architecture, initially designed for EV platforms, works across multiple powertrains, unlocking economies of scale and boosting product competitiveness.
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Both companies framed the deal as a milestone in their long-term strategic alliance, with XPeng CEO Xiaopeng He highlighting a shared vision for smart vehicle innovation and Volkswagen China CEO Ralf Brandstätter emphasizing the competitive and cost advantages in China's intense auto market.
Volkswagen continues to count on multiple partners for its electrification drive, including Rivian Automotive Inc. (NASDAQ:RIVN), which is supporting its flagship "Project Trinity" EV and a new budget model.
XPeng stock gained 64% year-to-date. The EV maker's weekly registrations fell 12.9% to 7,900 units from August 4–10, but surged 229.2% year-over-year, defying a weaker Chinese EV market after July's 5% month-on-month sales drop.
Lower-priced EVs under 100,000 yuan with basic self-driving features drove demand, while Fitch expects a fourth-quarter rebound as buyers rush to beat upcoming EV sales tax hikes.
Price Action: XPEV shares are trading higher by 2.12% to $19.79 premarket at last check on Friday.
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