What’s new: Chinese electric vehicle (EV) startup XPeng Inc. and German auto giant Volkswagen AG will jointly develop two new mid-size EVs with a planned rollout in 2026, the latter said Thursday.
The first of the two Volkswagen-branded EVs for the China market will be an SUV, according to the company in a press release.
The updated details for the two vehicles are part of a master agreement between the companies announced Thursday, following a deal inked in July. The companies will launch a joint sourcing program for common vehicle and platform parts to “optimize cost structures,” according to Volkswagen.
The deal will enable XPeng to make use of Volkswagen’s advantage in supply chain management to lower its production costs for both hardware and software components, an auto industry analyst told Caixin.
The background: XPeng CEO He Xiaopeng has repeatedly said that his company aims to reduce its costs by 25% by the end of 2024.
The partnership between the carmakers began in July, when XPeng sealed a $700 million investment deal from Volkswagen.
In January, XPeng delivered 8,250 vehicles, up 58% year-on-year, according to company data.
Related: In Depth: How XPeng Got Back Into Gear After Stalling in 2022
Contact reporter Ding Yi (yiding@caixin.com) and editor Jonathan Breen (jonathanbreen@caixin.com)
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