On July 22, 2024, Volkswagen Group (VOW3: XETRA) and XPeng Motors (XPEV: NYSE) signed a strategic cooperation and joint development agreement on electrical and electronic (E/E) architecture technology for Volkswagen's China Main Platform (CMP) and the previous Modular Electric Drive Matrix (MEB) platforms. The first vehicle model to be equipped with this architecture is expected to be mass-produced within the next 24 months in China.
Volkswagen Anhui recently launched the golden-badged ID.UNYX, the first Volkswagen EV fully dedicated to the Chinese market. The ID.UNYX is currently based on the MEB platform. Going forward, VW aims to achieve cost parity with the Chinese competition using the CMP platform, which is expected to reduce costs by 40 percent.
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This E/E architecture, referred to as China Electronic Architecture (CEA), is developed jointly by VCTC and CARIAD China with XPeng. From 2026 onwards, all electronic vehicle models of Volkswagen FAW, SAIC, and Anhui, will be equipped with this new CEA technology, demonstrating the German automaker's commitment to its "In China for China" strategy.
The two companies have established a joint development "Project House" in both Guangzhou and Hefei to advance this new E/E architecture. This comes on the back of recent rumors from local media that hundreds of VW engineers moved to the XPeng headquarters in Guangzhou.
Back in July 2023, Volkswagen announced plans to make an investment of USD 700 million in XPeng in return for 4.99% of XPeng Motors' equity at $15 per American Depositary Share (ADS). That investment also entailed a joint development of two Volkswagen-branded mid-size electric vehicle models for the Chinese market.
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In February 2024, the two parties established a joint procurement plan to accelerate the joint R&D effort of the two B-class EVs and also to lay the foundation for broader strategic cooperation.
In April 2024, the joint partnership further advanced with a strategic cooperation framework agreement on the E/E architecture technology based on XPeng's latest Electrical and Electronic Architecture (EEA) architecture. The XPeng G9 is currently based on the X-EEA 3.0 architecture. The CEA will be XPeng's EEA 3.5 architecture, said He Xiaopeng.