In a bid to further strengthen its electric vehicle (EV) offerings in China, Volkswagen is reportedly seeking a new partnership with Chinese EV startup Leapmotor, separate from its existing collaboration with XPeng Motors. According to a media report from Cailian, Volkswagen’s Jetta brand is currently in negotiations with Leapmotor, with a focus on using the startup’s technology to develop “economical electric cars.”
An insider familiar with the matter revealed that FAW, Volkswagen’s joint venture partner in China, has issued an internal document stating that the Jetta brand is engaging in talks with Leapmotor after its partnership with XPeng Motors.
While details of the potential deal are yet to be finalized, it is expected to differ from the collaboration with XPeng Motors. In the XPeng deal, Volkswagen plans to leverage XPeng’s Edward platform, currently used in their G9 and P7 models, to launch two new electric models. Volkswagen invested $700 million to acquire a nearly 5% stake in XPeng Motors as part of this partnership.
The proposed EV partnership between Volkswagen and Leapmotor is projected to follow a similar model to the recent collaboration between Audi and Chinese state-owned manufacturer SAIC. The report suggests that FAW-Volkswagen might consider acquiring a specific generation of zero-running platform technology from Leapmotor.
Jetta, once a popular brand under Volkswagen, was classified as a sub-brand in 2019. Since then, it has faced challenges in gaining traction in the market as the automotive industry transitions towards EVs. Last year, Jetta’s sales declined by 13.48% to 146,900 units.
Industry insiders believe that the next three years will be crucial for automotive intelligence development. German car manufacturers are acknowledged to have hardware advantages, but they may lack in the software department. As customers increasingly gravitate towards software-defined intelligent vehicles, the partnership with Leapmotor could potentially enable Volkswagen to fill its technology gaps in intelligent driving capabilities.
This strategic collaboration could offer Volkswagen access to cutting-edge new energy vehicle technology from Chinese car companies, potentially bolstering its position in the rapidly evolving EV market. The affordability of several Jetta and Leapmotor models, such as the VS5 and VS7, makes the partnership all the more appealing.
Leapmotor recently unveiled a new EV platform and its CEO, Zhu Jiangming, mentioned that the company was in advanced stages of discussions with two foreign automakers to license its technology. As Volkswagen explores this potential partnership, the automotive industry keenly observes how the alliance may shape the future of EV development in China.
