Volkswagen has partnered with XPeng, Stellantis has invested in Leapmotor, and Renault is seeking Chinese partners, signaling new collaborations between international and Chinese new energy vehicle (EV) companies [para. 1]. These partnerships aim to leverage complementary strengths in electrification, intelligent driving, and supply chain capabilities [para. 2][para. 6].
Volkswagen and XPeng announced a joint development agreement in February 2023, aiming to create two mid-sized Volkswagen-branded EVs and establish a joint procurement plan to reduce costs. Their collaboration began amid declining sales for Volkswagen in China and product update struggles for XPeng, which saw a nearly 40% year-over-year drop in deliveries in the first half of 2023 [para. 2]. XPeng CEO He Xiaopeng highlighted the companies’ complementary strengths: Volkswagen’s electrification and efficiency needs align with XPeng’s capabilities [para. 3].
Stellantis announced an investment in Leapmotor, acquiring around a 20% stake for approximately €1.5 billion. Stellantis, which owns brands like Jeep and Peugeot, seeks to leverage Leapmotor’s success in the Chinese market to enhance its presence. Leapmotor achieved sales of 144,000 vehicles in 2023, slightly more than XPeng [para. 6][para. 7].
Leapmotor’s Founder Zhu Jiangming, lacking marketing prowess compared to competitors like NIO, XPeng, and Li Auto, welcomed the investment to accelerate its development [para. 7][para. 8]. Stellantis’ investment followed significant market pressure and rapid due diligence, reflecting their urgency to innovate in the EV sector [para. 9].
Renault is also exploring partnerships in China, while Toyota invested in autonomous driving company Pony.ai and established a joint venture in 2023 [para. 22][para. 23]. These new joint ventures differ from past Sino-foreign collaborations, focusing on mutual technological benefits rather than just market access for technology [para. 24].
China’s NEV industry has shifted from rapid growth to high-quality development, attracting foreign carmakers interested in reverse exporting technology. As the market matures, Chinese companies like XPeng and Leapmotor, despite their strong technological capabilities, still struggle with profitability and need external financing to sustain and expand [para. 26][para. 27].
The rise of NEVs has significantly changed the landscape in China. By 2023, the market share for domestic passenger vehicle brands surpassed joint venture brands for the first time. UBS projects an increasing penetration rate for NEVs in China, predicting domestic brands will capture 63% of the market by 2024 [para. 32][para. 33][para. 34].
Volkswagen’s sales in China fell from a peak of 4.23 million units in 2019 to 2.399 million units in 2023. Their ID. series struggled in China despite popularity in Europe. Volkswagen aimed to reclaim market share through collaborations with local companies like XPeng, which produced the flagship G9 model well-received by Volkswagen [para. 41][para. 43][para. 45].
Stellantis also faced challenges in China and opted to invest in Leapmotor to enter the NEV market. Their lack of success with joint ventures like Dongfeng Peugeot-Citroën reflected the struggle to adapt to local market demands [para. 53][para. 54].
Foreign companies now perceive China not just as a market, but as a technology hub to leverage for competitive advantages. Chinese NEV companies like NIO and startups are receiving significant capital from foreign investors and local governments [para. 96], despite the growing global interest in their innovations [para. 93].
Overall, the new collaborations between international and Chinese companies reflect a shift towards mutual benefit through technology exchange, market expansion, and leveraging respective strengths to capitalize on the growing NEV market [para. 1][para. 6][para. 7][para. 22][para. 26].
AI generated, for reference only