Xpeng and Volkswagen's jointly developed E/E architecture is expected to equip Volkswagen-branded EVs produced in China from 2026.

(Image credit: Xpeng)

Xpeng (NYSE: XPEV) and Volkswagen Group have signed an agreement on vehicle architecture cooperation, advancing their joint efforts to build Volkswagen-branded electric vehicle (EV) models in the Chinese market.

Xpeng and Volkswagen have entered into a framework agreement on technical collaboration with respect to Electrical/Electronic architecture (E/E Architecture), the Chinese EV maker said in a statement today.

The two companies will jointly develop and integrate Xpeng's latest-generation E/E architecture into Volkswagen's China Main Platform (CMP), according to the statement.

The jointly developed E/E architecture is expected to equip Volkswagen-branded EVs produced in China from 2026, Xpeng said.

Xpeng's in-house developed E/E architecture is at the core of its vertically integrated, full-stack hardware and software technology, which allows software including ADAS (Advanced Driver Assistance System) and Connectivity OS to be decoupled from the underlying hardware and vehicle platforms, enabling rapid iteration of cross-platform software, the statement said.

The latest generation of Xpeng's E/E architecture utilizes a central computing and domain controller-based architecture to provide a high-performance in-vehicle computing environment and a competitive cost structure, according to the statement.

The E/E architecture supports Gigabit Ethernet high-speed data transfers between the central domain and ADAS domain controllers, Xpeng said.

A significant number of electronic control units have been integrated into the domain controllers, resulting in a highly integrated architecture and competitive cost structure, the EV maker said, adding that the E/E architecture also supports efficient whole-vehicle OTA for both customers' vehicles and vehicles at the end of manufacturing lines.

"The technical collaboration based on our industry-leading E/E Architecture takes our partnership to the next level and on a much larger scale. The collaboration will allow our Smart EV products to be both technologically competitive and cost competitive," said He Xiaopeng, chairman and CEO of Xpeng.

For its part, Volkswagen emphasized that this is part of its "In China, for China" strategy, which aims to increase the carmaker's innovative power in China.

"By expanding our partnership with XPENG and consistently integrating with China's industrial ecosystem, we will align our products even faster to the needs of Chinese customers," said Ralf Brandstätter, Member of the Board of Management of Volkswagen AG for China.

"High cost-effectiveness and a fast pace of development are crucial for our competitiveness in China's dynamic market environment. Through such efforts, we are taking on a leading role in the age of intelligent connected vehicles," Brandstätter added.

The latest agreement is part of Volkswagen's efforts to jointly develop EV models with Xpeng.

On July 26, 2023, Volkswagen announced that it would invest about $700 million to acquire an approximate 4.99 percent stake in Xpeng, and that the two companies plan to co-develop two Volkswagen-branded EV models for the mid-size vehicle market in China.

Xpeng and Volkswagen will build the two models using their respective core competencies, the Xpeng G9 platform, and connectivity and ADAS software, according to the statement last July.

On February 29, Xpeng said it signed a new agreement with Volkswagen aimed at accelerating the development of collaborative models and reducing costs through joint sourcing.

On April 11, Volkswagen said it would invest 2.5 billion euros ($2.66 billion) to further expand its production and innovation center in Hefei, Anhui province, and strengthen its local research and development capabilities.

Volkswagen will produce two Volkswagen-branded models co-developed with Xpeng in Hefei, the first of which will be a mid-size SUV scheduled to go into production in 2026, it said last week.

($1 = €0.9391)

Xpeng introduces G9 SUV and P7 sedan in Germany