Meanwhile, XPeng has a lot to learn from Volkswagen's auto expertise as well, and Volkswagen's distribution network could be helpful to XPeng's global expansion. XPeng is yet to make profit, so cash from Volkswagen can help sustain its R&D investment. In other words, that is a complementary tie-up that could potentially set a precedent as to how Western automakers and Chinese EV brands could, in a win-win manner, tap into each other's resources for the sake of future growth. Common sense tells us that Volkswagen would not have entered this deal had it seen Chinese EVs as a threat. Therefore, it's probably not surprising that Volkswagen has shrugged off UBS' rating downgrade. For battery-powered EVs, the battery is the single most valuable part, and it can make up more than 40% of a vehicle's cost.