Shanghai (ZXZC)- On the evening of December 6, Chinese new energy vehicle maker XPeng announced the successful completion of all prerequisites outlined in the share purchase agreement with Volkswagen Group, marking the finalization of the investment according to the terms and conditions of the agreement.

The disclosure in the announcement reveals the issuance of a total of 94,079,255 new shares, with a subscription amount of approximately $705.6 million (about 5.052 billion yuan). Following the completion of the transaction, in Class A ordinary share, Volkswagen's investor nominee shares account for 4.99%, with other shareholders holding 76.51%, while in Class B ordinary share, the percentage is 18.5%, totaling 1,885,355,830 shares.

Furthermore, Volkswagen Group has agreed to appoint a representative nominated by investors as a non-voting observer on the board. The observer is obligated to maintain confidentiality and refrain from improper use of business-related confidential information, including insider information, and must adhere to the company's insider trading policies and procedures, akin to a regular board member.

According to the strategic technology cooperation framework agreement signed by XPeng and Volkswagen Group, the two parties have made significant progress in jointly developing two B-segment electric vehicle models. The feasibility study for this project has yielded positive results and has been completed. Additionally, both parties are actively evaluating deeper strategic cooperation in intelligent electric vehicle technology.

2024 XPeng G9; photo credit: XPeng

On July 26 this year, Volkswagen had announced an investment of approximately $700 million in XPeng, acquiring a 4.99% stake in the latter. Post-transaction, Volkswagen would secure an observer seat on XPeng's board.

The two companies have reached a technology cooperation framework agreement. Initially focusing on the mid-size car market in China, they plan to jointly develop two electric vehicle models under the Volkswagen brand, complementing the product portfolio based on the MEB platform, with plans for a market launch in 2026.

According to available information, the two electric vehicles co-developed by Volkswagen and XPeng will utilize the "Edward" platform where the XPeng G9 is based. Moreover, starting next year, Volkswagen will begin paying XPeng technology service fees, overturning the decades-long trend of Chinese automakers paying technology licensing fees to foreign counterparts.