VW Partners With XPENG & Audi Partners With SAIC In China
Giving a big boost to Chinese smart EV startup XPENG, and also of course getting something for itself, Volkswagen Group announced today that it is investing approximately $700 million into XPENG, providing a capital increase, and in exchange getting 4.99% of the company’s shares at US$15 per ADS. The partnership also involves “joint development of intelligent, fully connected electric vehicles for the Chinese market.
The 4.99% share of XPENG that Volkswagen Group is getting is an interesting portion of the news. If I’m not mistaken, having 5% or more share would grant more rights and influence. As it is, though, Volkswagen Group “will hold a seat as an observer on the XPENG board of directors.” I don’t recall seeing another such arrangement — normally it’s board seat or no board seat, “an observer on the board.
“Local partnerships are an important building block in the Volkswagen Group’s ‘in China for China’ strategy. We are now accelerating the expansion of our local electric portfolio and at the same time preparing for the next innovation step,” Ralf Brandstätter, Volkswagen AG Board Member for China, commented. “With XPENG, we now have another strong partner that is one of the leading manufacturers in China in key technology areas.
Every one of those models comes from a Chinese automaker except the Tesla Model Y and Tesla Model 3 — and some people consider Tesla half Chinese, but it is a well established exception either way. The message is clear:How much the new partnerships help Volkswagen and Audi is yet to be seen — they’ll still be selling under their brands, but perhaps they will get reputation boosts, and perhaps they’ll offer cars that are more appealing to Chinese buyers.
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