Volkswagen China spends a lot of time on Xpeng to make new electric vehicles

BEIJING — Hundreds Volkswagen the staff spends time there Xpeng As the German auto giant and the Chinese startup work to create electric cars for China, Xpeng co-president Brian Gu told CNBC on Monday.

He also said the partnership will help Xpeng’s global ambitions.

Volkswagen announced a $700 million investment in Xpeng in July 2023 to jointly develop two electric cars for delivery in China in 2026. The vehicles will be based on the platform for Xpeng’s G9, a mid-size electric crossover SUV.

The German company’s employees spend more time at Xpeng’s offices than those of the Volkswagen startup, Gu said. They learn about the startup’s technology.

Xpeng’s driver assistance technology is widely regarded as one of the best available in China today. Tesla’s version, which is marketed as “fully self-driving,” is not fully accessible in China.

The German automaker did not immediately respond to a request for comment.

Gu emphasized that the upcoming cars will be “very different” from the cars currently sold by Xpeng or Volkswagen. He said the cars would likely have “better range, better charging options, much smarter driving and more luxury technology, for potentially the same price.”

China is an important market for Volkswagen. The German car manufacturer delivered Last year 3.2 million cars in China, more than the 3.1 million in all of Western Europe.

But like many traditional foreign auto giants, Volkswagen has also struggled in China as the local market rapidly shifts to battery-only and hybrid vehicles. The company Deliveries to China fell by 19.3% in the quarter ending in June compared to a year ago.

While Xpeng saw second-quarter deliveries grow 30% year-over-year to more than 30,200 vehicles, the startup continues to lag behind many of its Chinese rivals.

The company has also gone abroad, just like Chinese electric car companies BYD And Nio. In the second quarter, Xpeng said its overseas sales exceeded 10% of total sales for the first time.

CEO and founder of Xpeng, He Xiaopeng, told Bloomberg last week that the Chinese automaker is in the preliminary stages selecting a location in the European Union as part of future plans to localize production. The interview was published on Tuesday.

Asked for comment, Xpeng said it shared at the Beijing auto show in the spring that the company was considering the possibility of production abroad.

Gu told reporters separately on Monday that localization efforts in Southeast Asia were likely to happen sooner than any in Europe.

He said the 10-year-old startup aims to reach at least 40 countries and regions by the end of this year, up from about 30 so far.

Xpeng was launched in Thailand, Hong Kong and Macau earlier this month. Gu said the startup will launch in Malaysia this week and officially unveil its entry into Singapore, where Xpeng has a pop-up store.

The startup also plans to enter Australia, New Zealand, Britain and Ireland, Gu said.

On how the Chinese company is learning from its German partner, Gu said Xpeng employees visit Volkswagen offices in Hefei city, capital of China’s Anhui province, for design and technology, and Beijing for supply chain discussions.

The two companies announced in February that they had entered into a ‘joint purchasing programfor car parts.

Xpeng has been investing in robotics since 2020 and is now focusing on humanoid robots that can perform multiple tasks in factories, Gu told CNBC. He indicated that Xpeng would likely reveal more details soon.

But when asked whether that humanoid integration would include Volkswagen-related supply chains, he said it was too early for such an implementation.

— CNBC’s Sonia Heng contributed to this report.