Chinese electric vehicle maker Xpeng has announced the establishment of project houses in collaboration with Volkswagen to expedite the development of new EV architecture. These so-called project houses, located in Guangzhou and Hefei, China, will serve as collaborative hubs for engineers from both companies.

This initiative is part of a broader agreement between Xpeng and Volkswagen, aimed at producing more affordable EVs for the Chinese market, Volkswagen’s largest. Starting in 2026, all Volkswagen electric vehicles in China will feature this advanced and efficient architecture.

The primary goal of this latest collaboration is to facilitate the development and eventual production of jointly-developed EV architecture. This architecture will encompass the configuration of electronic components, modules, and the network within the vehicles.

The initiative aims to bring the new architecture to production within the next two years. The partnership between Xpeng and Volkswagen began last year when Volkswagen acquired a 4.99% stake in Xpeng for approximately $700 million.

As part of this collaboration, the two companies plan to jointly launch two Volkswagen-branded EV models by 2026.

The new project houses in Guangzhou and Hefei are critical components of this strategic alliance, enabling both companies to work closely on developing and implementing the new EV architecture.