AutoBeta(AutoBeta.net)12/07 Report--

On December 6, Xiaopeng announced that it had signed a technical framework agreement on strategic technical cooperation with Volkswagen (China) Investment Co., Ltd. (hereinafter referred to as "Volkswagen China"). At the same time, Xiaopeng issued Class A common shares to Volkswagen under the share purchase Agreement under the General mandate, and a total of approximately 94.0793 million Class A common shares (subscription shares) have been successfully allotted and issued to Volkswagen Finance Luxemburg S.A. (Volkswagen affiliates) at the purchase price of US $15 per American depositary share, with a total nominal value of US $940.79255.

According to the announcement, Volkswagen will hold about 4.99% of Xiaopeng's share capital after the deal is completed, and Volkswagen will become Xiaopeng's third largest shareholder, after he Xiaopeng and Alibaba Group holding Co., Ltd. Xiaopeng said it planned to use the net proceeds from the investment for general corporate purposes, including to meet working capital needs.

On July 26, Volkswagen and Xiaopeng announced that the two sides signed a framework agreement on strategic technical cooperation and minority equity investment, and reached a long-term strategic partnership. Volkswagen said that in the early stages of the partnership, the two sides plan to jointly develop two Volkswagen-branded electric models for the Chinese medium-sized car market, which will complement the product portfolio based on the MEB platform and plan to enter the market in 2026. Xiaopeng Automobile gives more details. The two pure electric models in cooperation with Volkswagen will be based on the joint development of Xiaopeng G9's electric vehicle platform and software. Xiaopeng Automobile will contribute the whole vehicle platform as well as intelligent cockpit and intelligent driving system. Volkswagen offers the world's leading engineering and supply chain capabilities, both of which hang the Volkswagen logo.

Xiaopeng revealed that in terms of strategic technical cooperation, Xiaopeng and Volkswagen Group will jointly develop models based on Xiaopeng's G9 model platform, intelligent cockpit and high-level auxiliary driving system software. In addition, the two sides will explore other potential strategic cooperation in a number of areas, including future electric vehicle platforms, software technology and supply chain cooperation.

He Xiaopeng, CEO of Xiaopeng Automobile, said in a Weibo post on October 12 that he Xiaopeng paid a personal visit to the headquarters of Volkswagen Group in Germany at the end of September and promoted further cooperation between the two sides in the supply chain. "these achievements, coupled with the fact that our whole process of design, development and manufacturing will be based on, we are confident that we will exceed the original target of reducing capital by 25 per cent in 2024, resulting in a significant increase in gross profit margin next year."

The reason why Volkswagen chose to cooperate with Xiaopeng Automobile is also a high recognition of the core technical competence of Xiaopeng Automobile self-research. Compared with Ulai and ideal, Xiaopeng is more focused on the technology-dominated market. Since its inception, it has focused on the development and mass production of fully self-driving cars, and it has always been regarded as the "ceiling" of high-level auxiliary driving capabilities of Chinese car companies.

As more and more automakers cut prices in the Chinese market, Volkswagen's dominant position in the era of internal combustion engines is threatened, and Volkswagen has invested tens of billions of yuan in electrification. However, limited by the ability of smart cockpit and high-end smart driving, Volkswagen electric vehicle market performance is far below expectations, and cooperation with Xiaopeng Automobile can make up for Volkswagen's shortcomings. Of course, the first joint model of Volkswagen and Xiaopeng will not be available until 2026, and the current environment of the Chinese market may have undergone earth-shaking changes, and it will take time to see whether it can still achieve good results in the market.

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