Volkswagen scooped up XPeng's G9 E/E architecture

A day after Volkswagen's $700 million deal with XPeng was announced we are getting more details about what it entails. As part of the agreement the German automaker will gain full access to the electronic and electric (E/E) architecture of XPeng's SUV - the G9. And we're not just talking about smart software. It's the full package - E/E architecture, smart software, and hardware solutions. Let's take a closer look at what's going down.

Records suggest that XPeng will receive technical service fees in the upcoming years. Once the first two Volkswagen models from this tie-up hit the market in 2026, XPeng will get a cut from each sale. That's like getting royalties from your least successful album.

This shows a clear vote of confidence for China's tech prowess and a bit of a smirk to those who thought Chinese EV tech wasn't ready for prime time. TechCo is taking on full responsibility for the development, engineering design, and production chain in this new venture.

Now, let's see why XPeng would part with such valuable tech. In the words of XPeng's finance and investment lead, the company simply couldn't go the Huawei route and only supply software solutions. Adjusting the software sans E/E architecture would demand an army of engineers, and that's a tall order even for a tech company.

Here's another twist in the tale - the G9 SUV, the very heart of the deal, didn't exactly bring XPeng loads of cash. It barely scratched the 12,000-unit mark since its debut in September, falling woefully short of the "bestseller" tag Xpeng had hoped for. So VW saved XPeng from serious trouble and got a shortcut to its next EV platform in return.

The XPeng G9 isn't a garden-variety EV - it runs on China's first 800V mass-production Silicon Carbide (SiC) platform and boasts the industry's first full-scenario ADAS. It's equipped with a whopping 31 lidar sensors, dual NVIDIA DRIVE Orin-X intelligent assisted driving chips, and a gigabit Ethernet communication architecture. A bit too futuristic, maybe, but Volkswagen seems to have taken a shine to it.

So Volkswagen gets to boost its EV game, and XPeng gets to offload a problematic model while still making a buck. This could be the beginning of a major shift in the EV sphere, certainly for VW. It has its foot now firmly in the door to the Chinese market, and with Audi striking a deal with SAIC, the VW Group will be looking towards the horizon with a new hope - time will tell if those two deals work out or end up being an expensive misstep.

Via