SHANGHAI -- Audi is in talks with SAIC to buy an electric vehicle platform from the Chinese state-owned automaker, two people familiar with the matter said.
The move comes as sales of Audi's electric cars in China fall sharply behind those of Tesla and domestic competitors such as Nio.
Audi is seeking to use the EV platform owned by SAIC's EV unit, IM Motors, said the sources, who sought anonymity as the matter is private. Talks are at an advanced stage, one of the sources said.
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.
Automotive News Europe sister publication Automobilwoche reported earlier this week that Audi was in discussions with several Chinese EV manufacturers to acquire an electric platfrom.
Audi's own EV push has stalled after Volkswagen Group's software troubles delayed the launches of key new electric cars such as the Q6 E-tron. VW Group also cancelled Audi's Artemis project for an autonomous flagship electric car.
Volkswagen Group's SSP software-led platform, which Audi will use, has also now been pushed back to 2029 to ensure any software glitches are resolved.
Audi's search for a Chinese electric platform spotlights the pressure on Western brands in the world's largest auto market, as they battle over EVs.
Established automakers, such as Toyota, have been racing to follow the lead of Tesla and some Chinese EV makers in designing EV platforms engineered from the ground up in the effort to cut costs, improve performance and protect margins.
Audi has not bought a platform from another manufacturer before and until now, has used Volkswagen's EV-dedicated MEB platform for models on offer in China.
It is currently developing a new EV platform with Porsche called Premium Platform Electric (PPE) that will underpin the Q6 e-tron and Porsche Macan Electric. In China, the PPE platform will underpin cars built from the end of 2024 at a plant Audi is building in China's northeastern city of Changchun.
Last month, Audi CEO Markus Duesmann, who will step down from the role in September, told Reuters the brand had to speed development of new models to meet a surge in demand for electric vehicles, especially in China.
Audi offers two EV models - Q4 E-tron and Q5 E-tron - developed on Volkswagen's MEB platform in China.
Sales of Audi EVs were just over 3,000 units in the first quarter in China, while BMW sold 21,646 EVs and Tesla sold 137,429 cars, figures from industry body the China Association of Automobile Manufacturers show.