Volkswagen announced on Wednesday a duo of collaborations with Chinese companies to bolster the automaker’s presence in the country.
The German vehicle manufacturer will partner with Xpeng Inc. to develop two new VW brand models on the MEB platform at Volkswagen's new technology center in Hefei, while announcing further plans for cooperation between its subsidiary Audi and the Chinese company SAIC.
The partnership with Xpeng will develop electric vehicles aimed at the middle-class demographic, a segment not yet covered by Volkswagen's planned vehicle line-up in China.
The models will use Xpeng's Advanced Driver Assistance System (ADAS), which was upgraded in March and is like Tesla's Full Self-Driving (FSD) technology not yet available in China.
Volkswagen said it plans to invest roughly $700 million in Xpeng and purchase a 4.99% stake in the company, as part of a series of recent partnerships with Chinese firms that have included battery-maker Gotion and technology firm Horizon Robotics.
The two new VW models are slated for release in 2026.
Meanwhile, Volkswagen subsidiary Audi and SAIC will collaborate again on the development of models and a new platform but did not give details or a timeline.
The models would be in a segment Audi has yet to broach in China, the company said.
Reuters contributed to this report.
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