In a significant development, the cooperation agreement between Xpeng and Volkswagen has underscored China’s automotive industry’s commitment to sharing technological advancements on a global scale, according to Xpeng’s CEO, He Xiaopeng.
Established German automaker, the Volkswagen Group, recently concluded an agreement to acquire a 4.99-percent stake in the Chinese electric vehicle (EV) startup, Xpeng. This collaboration entails the joint development of two EV models tailored for the Chinese market.
The pact has drawn substantial attention, as it grants Volkswagen access to Xpeng’s cutting-edge technologies, notably the advanced driving assistance system (ADAS). This move bolsters Volkswagen’s strategy to penetrate China’s rapidly expanding EV market.
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Speaking exclusively to Xinhua in an interview, He Xiaopeng, the CEO of Xpeng, highlighted how Chinese auto firms have shifted towards sharing their pioneering technologies with international counterparts, marking a departure from the conventional unidirectional technology transfer from foreign to Chinese auto companies.
He emphasised, “Our collaboration extends to both equity and technological aspects, carrying immense significance.” He further elaborated that this collaboration also signifies a notable first – a Chinese carmaker deriving profits from selling their proprietary software.
At a time when global challenges stemming from growing protectionist sentiments and anti-globalisation trends persist, Xpeng’s partnership with Volkswagen conveys a positive message, underscoring the concept that “enhanced collaboration results in mutually beneficial outcomes,” as highlighted by the CEO.
He stated, “This strategic partnership reaffirms China’s automotive sector’s commitment to international engagement, demonstrating a readiness to exchange technologies and pursue shared progress.”
Xpeng, established in 2015, has emerged as a rising star in China’s new energy vehicle (NEV) landscape, which has witnessed rapid growth due to the nation’s drive to achieve carbon dioxide emissions peak by 2030.
In the first half of 2023, China observed a 42.4 percent year-on-year expansion in NEV production, reaching nearly 3.79 million units. Concurrently, NEV sales surged by 44.1 percent, amounting to almost 3.75 million units, according to data from the National Development and Reform Commission.
See also: Xpeng Aims for Significant International Expansion in 2024, Focused on Developed Markets
The Guangzhou-based company has gained prominence for its robust emphasis on technological innovation, boasting a workforce where 40 percent are engaged in research and development (R&D) activities. In 2022, the company’s R&D expenses stood at 5.21 billion yuan ($728 million).
He pointed out that Volkswagen’s decision to partner with Xpeng was a result of extensive research on Chinese enterprises and technologies, along with an acknowledgment of Xpeng’s technological edge.
The partnership stands to benefit both parties; for Volkswagen, it offers a streamlined process for integrating hardware and software, expediting new product development, while Xpeng stands to enhance its brand reputation, technological prowess, and commercial value through this collaboration, He concluded.
