Volkswagen seems to be forming a brand new EV partnership in China, separate from its collaboration with XPeng Motors. In keeping with a brand new report, Volkswagen is negotiating with Hangzhou-based EV startup Leapmotor to outsource its expertise for its Jetta model.

The media report from Cailian claims Volkswagen’s Jetta model is holding talks with Leapmotor to make use of its expertise with a deal with “economical electrical automobiles,” citing sources.

An individual conversant in the matter informed reporters that FAW (Volkswagen’s JV accomplice) has issued an inner doc saying, “After Xaiopeng, Volkswagen’s Jetta model is negotiating cooperation with Leapmotor.”

Nevertheless, if a deal is reached, it’s anticipated to vary from the collaboration with XPeng Motors (Xaipeng).

VW will make the most of XPeng’s Edward platform, used within the G9 and P7 fashions, to launch two new electrical fashions. The automaker invested $700 million for a virtually 5% stake within the Chinese language EV maker.

Audi and Chinese language state-owned producer SAIC additionally confirmed a partnership every week earlier than to hurry up EV growth within the area.

Volkswagen negotiating one other EV partnership in China

Volkswagen’s new EV partnership is anticipated to be much like the Audi-SAIC collaboration fairly than the XPeng deal. In keeping with the report, “This time FAW-Volkswagen could be very prone to ‘purchase out’ a sure era of zero working platform expertise.”

Jetta was as soon as a preferred Volkswagen model, however the automaker broke it off in 2019, classifying it as a sub-brand.

Since then, Jetta has struggled to realize traction because the market strikes to EVs. In keeping with the report, Jetta’s gross sales fell by 13.48% to 146,900 items final yr.

Trade insiders mentioned the subsequent three years can be crucial for automotive intelligence growth. The report notes German automobiles have the benefit in {hardware} however are missing within the software program division.

Within the new EV period, clients are gravitating towards software-defined clever automobiles fairly than basing their purchases strictly on seems. The business insiders claimed:

If the cooperation with Leapmotor comes true, Volkswagen will absolutely depend on the technical energy of Chinese language automobile firms to make up for its shortcomings within the area of clever driving.

They continued, “Volkswagen urgently wants the brand new vitality car expertise of Chinese language automobile firms to reverse disadvantages of the market.”

A number of Jetta and Leapmotor fashions, such because the VS5 and VS7, are in the identical worth vary, making the collaboration extra accessible.

Leapmotor revealed a brand new EV platform this week as CEO Zhu Jiangming mentioned the corporate was nearing offers with two overseas automakers to license its expertise.

Electrek’s Take

Volkswagen has misplaced floor in China, a promote it as soon as dominated. The German automaker was surpassed by China’s largest EV maker BYD in passenger automobile gross sales within the first three months of the yr, extending its lead via July.

Because the report notes, Volkswagen isn’t solely lagging behind rivals like BYD and Tesla, however up-and-coming EV makers like NIO, XPeng, and Li Auto are additionally gaining market share, in lots of circumstances, in the identical segments as VW.

If the cope with Leapmotor goes via, Volkswagen will rely closely on Chinese language tech to hold gross sales in its most essential market.