Shares of Chinese EV maker XPeng jumped sharply after the company announced an expanded strategic partnership with German automaker Volkswagen to build the largest electric vehicle supercharging network in China.

The two companies signed a Memorandum of Understanding (MoU), under which the two parties will open up their respective fast-charging networks to each other's customers, and work together to build a ultra-fast charging network in the country that comprises over 20,000 charging terminals covering 420 cities.

Shares of XPeng Motors jumped as much as five percent in the morning session in Hong Kong, before retreating to HK$46.45 at noon, 3.9 percent higher than the close in the previous session.

The two sides will also explore their joint construction of co-branded ultra-fast charging stations in China to improve customer experience, the statement added.

XPeng and Volkswagen forged a partnership in July 2023, when Volkswagen bought 4.99 percent of XPeng for about US$700 million with plans to jointly launch two Volkswagen-branded EV models by 2026 for the mid-sized car market.

Volkswagen later said it had developed a new architecture for smart electric vehicles with XPeng that would help it offer more affordable EVs in its largest market. (Additional reporting by Reuters)