Germany's Volkswagen AG is stepping up cooperation with China to develop affordable electric vehicles. The company is increasing its investment in XPeng to produce new models jointly.

The details are reported by CarNewsChina. XPeng signed a deal with Volkswagen AG on July 26. The German group take a 4.99% stake in the Chinese automaker in exchange for a $700 million increase in investment.

VW is interested in joint development of Chinese electric cars, which are traditionally cheaper than European ones. However, they plan to use the German MEB modular architecture for this purpose.

Audi has also strengthened cooperation with China's SAIC Motor. The automakers will develop a joint platform and new electric cars.

According to the agreements, it is a question of creating models exclusively for the Chinese market for starters. Electric cars will also be manufactured in China.

To remind, as OBOZREVATEL previously reposted, cheap Geely electric pickup appeared on the market. Production of the model has already started and the car received interesting features.