Volkswagen announced two agreements aimed at strengthening the German carmaker's position in the Chinese market, including a partnership between the Volkswagen brand and China's Xpeng Inc to build two new models.

Volkswagen and Xpeng agreed to develop two new VW brand models on the MEB platform at Volkswagen's new technology center in Hefei, to be rolled out from 2026 and featuring Xpeng software on autonomous driving.

Volkswagen will invest around $700 million in Xpeng and purchase a 4.99% stake in the company by way of a capital increase.