SHANGHAI — Audi is in talks with SAIC to purchase an electrical car platform from the Chinese language state-owned automaker, two folks conversant in the matter stated.

The transfer comes as gross sales of Audi’s electrical automobiles in China fall sharply behind these of Tesla and home opponents reminiscent of Nio.

Audi is searching for to make use of the EV platform owned by SAIC’s EV unit, IM Motors, stated the sources, who sought anonymity because the matter is personal. Talks are at a sophisticated stage, one of many sources stated.

IM Motors, which began supply of its first mannequin, the L7 sedan, in 2022, is a premium EV model managed by SAIC and its traders embody e-commerce large Alibaba Group.

Audi declined to touch upon whether or not the talks have been going down. SAIC declined to remark.

Reuters was not instantly capable of set up the worth Audi has supplied for the EV platform and whether or not SAIC would nonetheless be concerned in making the L7 sedan after the deal.

Automotive Information Europe sister publication Automobilwoche reported earlier this week that Audi was in discussions with a number of Chinese language EV producers to amass an electrical platfrom.

Audi’s personal EV push has stalled after Volkswagen Group’s software program troubles delayed the launches of key new electrical automobiles reminiscent of the Q6 E-tron. VW Group additionally cancelled Audi’s Artemis projectfor an autonomous flagship electrical automobile.

Volkswagen Group’s SSP software-led platform, which Audi will use, has additionally now been pushed again to 2029 to make sure any software program glitches are resolved.

Audi’s seek for a Chinese language electrical platform spotlights the strain on Western manufacturers on the earth’s largest auto market, as they battle over EVs.

Established automakers, reminiscent of Toyota, have been racing to observe the lead of Tesla and a few Chinese language EV makers in designing EV platforms engineered from the bottom up within the effort to chop prices, enhance efficiency and defend margins.

Audi has not purchased a platform from one other producer earlier than and till now, has used Volkswagen’s EV-dedicated MEB platform for fashions on supply in China.

It’s presently creating a brand new EV platform with Porsche known as Premium Platform Electrical (PPE) that can underpin the Q6 e-tron and Porsche Macan Electrical. In China, the PPE platform will underpin automobiles constructed from the tip of 2024 at a plant Audi is constructing in China’s northeastern metropolis of Changchun.

Final month, Audi CEO Markus Duesmann, who will step down from the position in September, informed Reuters the model needed to velocity improvement of latest fashions to fulfill a surge in demand for electrical autos, particularly in China.

Audi gives two EV fashions – This fall E-tron and Q5 E-tron – developed on Volkswagen’s MEB platform in China.

Gross sales of Audi EVs have been simply over 3,000 items within the first quarter in China, whereas BMW offered 21,646 EVs and Tesla offered 137,429 automobiles, figures from trade physique the China Affiliation of Car Producers present.