AUDI AG is in talks with SAIC Motor Corporation Limited (SHSE:600104) to buy an electric vehicle platform from the Chinese state-owned automaker, two people familiar with the matter said, an unprecedented effort to shore up market share. The move, coming as sales of Audi's EV products fall sharply behind those of Tesla and domestic competitors such as Nio, spotlights the pressure on all legacy and Western brands in the world's largest auto market, as they battle over EVs. The premium car brand of Volkswagen AG (VOWG_p.DE) seeks to take over the EV platform owned by SAIC's EV unit, Zhiji Motor Technology Co., Ltd. (IM Motors), said the sources, who sought anonymity as the matter is private.

Talks are at an advanced stage, one of them added. IM Motors, which started delivery of its first model, the L7 sedan, in June 2022, is a premium EV brand controlled by SAIC and its investors include e-commerce giant Alibaba Group (9988.HK). Audi declined to comment on whether the talks were taking place.

SAIC declined to comment. Reuters was not immediately able to establish the price Audi has offered for the EV platform and whether SAIC would still be involved in making the L7 sedan after the deal.