Volkswagen Acquires 5% Stake in China’s Xpeng after a Joint Deal to Develop EV

The German automobile manufacturer Volkswagen stated on Wednesday that it has signed a deal with Chinese EV maker Xpeng to develop two new electric vehicles for China. As part of the deal, the German company will invest $700 million in Xpeng for a shareholding of 4.99%.

Xpeng Inc ADR in the U.S. settled 26% higher on Wednesday following the news. 

The signing deal is for Volkswagen and Xpeng to develop two midsize battery-electric models based on the platform that underpins Xpeng’s G9, a midsize electric crossover SUV.