Volkswagen invests $700 million in Chinese EV maker Xpeng to boost sluggish sales | CNN Business

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Volkswagen has bought nearly 5% of Chinese electric vehicle maker Xpeng for $700 million and agreed a strategic partnership to develop two new models as it attempts to reverse a decline in sales in the world’s biggest car market

Subject to final agreement, the companies will join forces to develop two mid-sized VW-branded EVs for the Chinese market, to be rolled out in 2026, Volkswagen said in a statement. The German group’s Audi subsidiary will also work more closely with its existing partner, SAIC Motor, China’s biggest car maker. Shares in Xpeng jumped more than 30% Thursday in Hong Kong, leading a broad rally in Chinese EV stocks.

Geopolitical tensions between China and the West are complicating life for companies like Volkswagen that rely on China. Volkswagen has faced criticism over its factory in Xinjiang, a region where human rights groups have documented the use of forced labor. China denies any abuses, and Volkswagen said earlier this year that it saw no sign of forced labor during a recent visit to the plant. The tensions are prompting companies and governments to consider supply chains and trade policies.

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EV stocks get a broad boost from VW’s purchase of 5% stake in XPengShares of electric-vehicle makers got a broad boost Wednesday as investors cheered Volkswagen AG's $700 million investment in China-based XPeng Inc.
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