Volkswagen and XPENG Sign Technical Cooperation Framework; Feifan F7/R7 Receive Major Software Update

01 Weekly Index

02Weekly Highlights

Volkswagen Brand and XPENG Reach Technical Cooperation Framework Agreement

On July 26, 2023, the Volkswagen Group announced a cooperation between its Volkswagen brand and Audi brand with XPENG and Shangqijituan.

Volkswagen and XPENG have reached a framework agreement for technical cooperation. The two companies plan to jointly develop two electric vehicles under the Volkswagen brand, targeting China's mid-size car market. These new models will supplement the product lineup based on the MEB platform and are scheduled to enter the market in 2026.

Meanwhile, Volkswagen Group will invest approximately USD 700 million in XPENG to acquire roughly 4.99% of XPENG's equity at a price of USD 15 per ADS (American Depositary Share). Volkswagen Group will obtain an observer seat on XPENG's board of directors.

In its collaboration with Shangqijituan, Audi will deepen existing ties by jointly developing intelligent connected electric vehicles to expand its premium market portfolio. Officially, Audi plans to enter previously uncovered segments in China by launching a brand-new electric model as its first step.

Both partnerships involve the joint development of dedicated intelligent connected vehicles (ICVs) for the Chinese market. This indicates that Volkswagen Group is strengthening its position in the Chinese automotive industry and advancing its electrification strategy in the region.

Given the partnership between Volkswagen and XPENG, it is worth examining the broader context. Over the past 40 years, China's automotive industry has matured; in the era of new energy vehicles, domestic models have finally gained global recognition, beginning to export technology to foreign automakers.

Commentary:

Currently, among XPENG's three major shareholders, the first is He Xiaopeng with a 20.47% stake, followed by Alibaba with 11.1%, and third is Volkswagen Group with 4.99%.

A source familiar with the matter revealed that Volkswagen nearly disassembled smart electric vehicles from all major Chinese automakers for research before selecting a partner. This indicates that XPENG’s hardware, software, and architecture received strong recognition.

The partnership between Volkswagen and XPENG is mutually beneficial and signals a growing trend of domestic automakers collaborating with international brands by trading technology for market access.

This is an emerging trend; it remains to be seen which companies will form the next alliance.

Since announcing its cooperation with Volkswagen, XPENG’s U.S. stock price has risen more than 50% in cumulative terms.

On July 28, XPENG’s U.S. stock price surged 15.73%, closing at USD 23.4 per share. Based on the closing price of USD 15.36 on July 25, the cumulative increase exceeds 50%.

Following the announcement of its partnership with Volkswagen on July 26, XPENG’s U.S. stock price initially jumped over 40%, later pulled back slightly, but still closed the day with gains exceeding 25%.

Feifan F7/R7 Receives First Major 'Smart AI' System Update

The 'Smart AI' update for the Feifan F7 and R7 covers intelligent driving and intelligent cockpit features, featuring 16 major upgrades.

First, the basic intelligent driving features have been enhanced in three key areas:

If the system detects a vehicle ahead with its hazard lights on during heavy rain, the navigation-guided driving function will automatically switch to a conservative mode to improve safety.

The safety of lane changes into gaps has been improved. When two large vehicles are positioned one behind the other, the system ensures sufficient clearance from the rear large vehicle during the lane change. After completing the maneuver, it proactively maintains distance from the adjacent large vehicle, maximizing safety.

The vehicle’s cornering speed has increased by up to 15%, allowing high-speed curves on ramps to be navigated at speeds of up to 60 km/h.

Additionally, Feifan’s highway navigation-guided driving feature will now cover 27 provinces and 205 cities nationwide.

The new-generation Feifan Intelligent AI System has also upgraded the smart cabin experience. The RISING MAX multi-threaded audio system architecture has seen a 9% performance boost, screen seamless transition speed has increased by 10%, and independent viewing for both driver and front passenger is smoother.

Following this system update, Feifan users can access 4,000 new generalized voice commands, such as adjusting seat positions, controlling driving modes, initiating automatic parking, and opening or closing the iQIYI app in the rear seats. Furthermore, to meet diverse personalized needs, the Bach Cabin in the Feifan F7 will simultaneously integrate a digital marketplace, expanding options for wallpapers and themes. It also introduces a new 4D intelligent scenario interaction experience called 'Leap over the Alps,' delivering a multi-sensory, intelligent comfort experience.

With the support of the industry's most advanced audio architecture, this upgrade enhances the dual DSP processing performance of the Feifan F7 and further optimizes the Dirac algorithm. The clarity of high-frequency sound in music is improved, vocal separation is strengthened, and the three-dimensional depth of the 3D vector sound field is further enhanced, providing a more precise sense of direction. The Feifan R7, synchronized with the F7, has added Reishi KTV to add comfort to the musical journey.

Weimaqiche Set to Launch Overseas

Weimaqiche recently released an image showing a new vehicle parked in front of a cargo ship, described as 'ready to depart.'

Previously, Weimaqiche stated: 'We are fully committed to user services, legally and orderly clearing debts, and actively promoting our new energy vehicle overseas expansion plan. We expect to resume production and work soon and return to normal operations.'

Commentary:

Is Weimaqiche aiming for the strategy of 'blooming within the walls but fragrant outside'?

Written by: James Edited by: James