The move builds on their July 2024 master agreement and aims to accelerate Volkswagen's software-defined vehicle strategy, enabling faster software iterations, over-the-air updates, and shorter development cycles.

Joint R&D teams validated that the architecture, initially designed for EV platforms, works across multiple powertrains, unlocking economies of scale and boosting product competitiveness.

Also Read: XPeng Founder Reveals Bold Plan To Hire 8,000 More By 2025

Both companies framed the deal as a milestone in their long-term strategic alliance, with XPeng CEO Xiaopeng He highlighting a shared vision for smart vehicle innovation and Volkswagen China CEO Ralf Brandstätter emphasizing the competitive and cost advantages in China's intense auto market.

XPeng stock gained 64% year-to-date. The EV maker's weekly registrations fell 12.9% to 7,900 units from August 4–10, but surged 229.2% year-over-year, defying a weaker Chinese EV market after July's 5% month-on-month sales drop.

Lower-priced EVs under 100,000 yuan with basic self-driving features drove demand, while Fitch expects a fourth-quarter rebound as buyers rush to beat upcoming EV sales tax hikes.

Price Action: XPEV shares are trading higher by 2.12% to $19.79 premarket at last check on Friday.

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