Xpeng is receiving significant investment from Volkswagen China to develop new electric vehicles.

• Xpeng co-president Brian Gu revealed that hundreds of Volkswagen staff are currently working with the Chinese startup to develop electric cars for the Chinese market.
• In July 2023, Volkswagen invested $700 million in Xpeng to jointly develop two electric cars for delivery in China, expected in 2026.
• The partnership will help Xpeng's global ambitions." Gu said.

Hundreds of staff are working at Xpeng as the German auto giant and Chinese startup collaborate to produce electric cars for China, Xpeng co-president Brian Gu revealed to CNBC on Monday.

He also said the partnership will help Xpeng's global ambitions.

In July 2023, Volkswagen invested $700 million in Xpeng to develop two electric cars for delivery in China by 2026. These vehicles will be based on the platform of Xpeng's G9, a midsize electric crossover SUV.

Gu stated that the German company's employees are spending more time at Xpeng's offices than the startup is at Volkswagen's, and they are learning about the startup's technology.

In China, Xpeng's driver-assist technology is highly regarded as one of the top options currently available. However, Tesla's "full self-driving" version, which is marketed in China, is not yet fully accessible.

The German automaker did not immediately respond to a request for comment.

Gu stated that the upcoming vehicles from Xpeng and Volkswagen will be "significantly different" from their current models. He predicted that these cars would offer "improved range, charging, advanced driving technology, and luxury features at the same price point, possibly."

In 2020, Volkswagen sold 3.2 million cars in China, surpassing the 3.1 million cars sold in Western Europe.

As the local market in China rapidly shifts towards battery-only and hybrid powered vehicles, Volkswagen, like many traditional foreign auto giants, has struggled in the region, with its China deliveries plummeting by 19.3% in the quarter ended June from the previous year.

Despite Xpeng's second-quarter deliveries growing by 30% year-on-year to over 30,200 vehicles, the startup still lags behind many of its Chinese competitors.

Looking overseas

Meanwhile, Xpeng has announced that its overseas sales surpassed 10% of its total revenue in the second quarter.

He Xiaopeng, CEO and founder of Xpeng, revealed to Bloomberg last week that the Chinese automaker is considering a site in the European Union for future localized production. The interview was published on Tuesday.

Xpeng stated during the Beijing auto show in the spring that the company is considering the possibility of producing overseas.

Gu revealed Monday that localization efforts in Southeast Asia are likely to occur before any in Europe.

The 10-year-old startup aims to increase its reach to at least 40 countries and regions by the end of this year, compared to the current 30.

Xpeng has launched in Thailand, Hong Kong, and Macao earlier this month. This week, the startup is launching in Malaysia and officially unveiling its entry into Singapore, where Xpeng has a pop-up store.

Gu stated that the startup intends to expand into Australia, New Zealand, the U.K., and Ireland.

Supply chain partnership

Xpeng staff visit Volkswagen offices in Hefei and Beijing for design, technology, and supply chain discussions, according to Gu.

In February, the two companies revealed that they had established a "collaborative procurement initiative" for automotive components.

Since 2020, Xpeng has been investing in robotics and is now concentrating on developing human-like robots capable of performing various tasks in factories. Gu, the CEO of Xpeng, stated that the company would likely disclose more information about its robotics plans soon.

He stated that it was too early to include Volkswagen-related supply chains in the humanoid integration.

— CNBC's Sonia Heng contributed to this report.