Feb 29 (Reuters) - German automaker Volkswagen and Chinese electric vehicles maker XPeng have entered an agreement for joint development of two B-class battery EVs, the companies said on Thursday.

As a part of the agreement, the companies will work together to share the scale of both parties for common vehicle and platform parts used by both the partners, which would help in reducing costs of the platform and help in achieving "significant synergies" for the partnership.

Joint purchasing activities and use of technologies in the design and engineering phase will reduce development time of the EVs by more than 30%, Volkswagen said.

"We have started to realize synergies through our Joint Sourcing Program. I firmly believe there is a lot of upside potential to this partnership that we can explore," said Xiaopeng He, chairman and CEO of XPeng.

Volkswagen is also focusing on partnerships with local high-tech companies in China, it said.

(Reporting by Echha Jain in Bengaluru; Editing by Sherry Jacob-Phillips and Rashmi Aich)