VLKAF - Electric vehicle thunderbolt: XPeng soars after Volkswagen takes a 5% stake

2023-07-26 09:54:00 ET

XPeng ( NYSE: XPEV ) skyrocketed in early trading on Wednesday after announcing a cooperation deal with Volkswagen ( OTCPK:VLKAF ) covering strategic technical collaboration.

Notably, the German automaker also made a $700M strategic minority investment in XPeng ( XPEV ) for a 4.99% stake.

"The objective of the strategic technical collaboration is to leverage each other’s complementary strengths and forge a long term win-win strategic partnership."

In connection with the strategic technical collaboration, XPeng ( XPEV ) and the Volkswagen will jointly develop two B-class battery electric vehicles models for sale in the Chinese market under Volkswagen brand, leveraging respective core competencies and XPENG’s G9 platform and connectivity and ADAS software. The models are expected to start production  in 2026.

In addition, the automakers will explore additional potential strategic cooperation in a number of areas, including collaboration on future EV platforms, software technologies and supply chain.

Shares of XPeng ( XPEV ) soared 33.92% in early trading on Wednesday. NIO ( NIO ) jumped 8.98% and Li Auto ( LI ) rose 4.99% . Tesla ( TSLA ) held its ground, with a 0.25% gain. Shares of Volkswagen ( OTCPK:VLKAF ) fell 2.15% in Frankfurt trading.

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