Xpeng plans tech push beyond Volkswagen to court foreign automakers

Technology offering moves beyond Volkswagen

Chinese electric vehicle maker Xpeng (XPEV) has contacted potential partners that expressed interest in its technology, according to one person familiar with the matter. The sources did not identify the automakers or other prospective partners.

The plans, reported by Reuters for the first time, build on Xpeng’s existing alliance with Volkswagen and could extend to foreign software developers and automobile suppliers.

Key details

• Xpeng plans to offer its electrical and electronic architecture, cockpit systems, Turing AI chips and advanced-driver assistance software.
• The company also intends to broaden its technology licensing and customisation business to robotaxis, robotics and other physical AI applications.
• The proposed offering would include the operational deployment of Xpeng’s robotaxis.
• Xpeng established a strategic commercialisation team about six months ago to explore technology partnerships and other commercial opportunities.

Volkswagen services lift segment margin

Xpeng’s partnership with Volkswagen began in July 2023, when the German automaker bought a 4.99% stake in the Chinese EV maker for about $700 million. The alliance covers EV platforms, software and electronic architecture.

The first jointly developed model, the ID.UNYX 08 electric SUV, uses Xpeng’s cockpit systems, smart-driving technology and Turing AI chips. It entered mass production in March 2026, 24 months after the collaboration started.

The partnership has become a meaningful source of revenue for Xpeng, particularly through technology services, although the company remained loss-making in the first and second quarters of the current financial year.

Vehicle sales revenue was little changed in the second quarter, while vehicle margin narrowed to 12.1% from 14.3%. Revenue from services and other businesses almost doubled, lifting that segment’s margin to 75.1% from 53.6% a year earlier.

Management said on a post-earnings call in late August that the increase was driven mainly by technology research and development services under the Volkswagen partnership, along with higher revenue from components and accessories sales.

Robotaxis and humanoid robots broaden strategy

Xpeng is also expanding into robotaxis, humanoid robots and flying cars. CEO He Xiaopeng has said humanoid robots could eventually generate significantly higher margins than vehicles.

The company’s general-purpose humanoid robot, IRON, walked off production lines earlier this month as Xpeng moves toward mass production by year-end. Commercial deliveries in China and overseas markets are planned for 2027.

Xpeng’s cumulative overseas sales have surpassed 100,000 vehicles since it entered Norway in 2020. Its G9L SUV is due to make its international debut at the Paris Motor Show next month and will become the fourth model built at Magna’s Austrian plant, following the G6, G9 and P7+.