VW fronts Chinese EV maker US$700 million to make it cars with Tesla FSD-like assistant

Volkswagen recently acknowledged a drop in demand for its electric vehicles and has decided to increase its bet on the world's largest car market by partnering with local EV makers in China. After Audi announced a joint venture with the largest government-owned automaker in China SAIC to enter the premium EV market there, now VW says it will develop two midsize vehicles built around XPeng's G9 platform.

For the purpose, VW bought a 5% stake in XPeng at a price of US$700 million and will get an observer seat at its board of directors in exchange. The new G9-based electric vehicles will be released in 2026 and will be sold under the VW branding. This way, besides access to XPeng's modern powertrain and fast charging know-how, VW will also be able to use its ADAS autonomous driving software that is developed specifically with the Chinese roads and drivers in mind.

According to Deutsche Bank analyst Edison Yu, "this is yet another sign that the China auto industry is rapidly changing and hyper competitive, forcing legacy OEMs to make big changes." 

The G9 SUV offers fast 800V powertrain that can top up the battery in 15 minutes on the company's dedicated 480kW charging network. This can add 200km (124 miles) of driving range with just 5 minutes of top-up. Moreover, the G9 offers XPeng's modern X-EEA 3.0 electronic and electrical architecture, XPower 3.0 powertrain and supercharging, and the PILOT 4.0 advanced driver assistance system (ADAS).

The new ADAS self-driving system is augmented by two LiDARs situated directly in the headlights, a suite of cameras, and 508 TOPS ECU computational performance thanks to the two NVIDIA Drive Orin automotive chipsets. Topping off the list of modern EV technologies that VW will gain access to in China via its investment in XPeng is the Gigabit speed connectivity that allows OTA firmware updates to be delivered and installed in 30 minutes without interrupting the vehicle's operation.

"These collaborations are intended to expand the existing product range to include models for particularly promising customer and market segments," says Volkswagen.

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