Chinese electric car maker Xpeng Motors plans to make its technology available to foreign automakers besides its long-term partner Volkswagen. The company is looking for new revenue streams and has been in talks with a number of potential customers who have expressed interest in its development, according to people familiar with the matter.
Image source: Xpeng Motors
Xpeng Motors will provide its electrical and electronic architecture, vehicle control systems, Turing artificial intelligence chips and advanced driver assistance software to other automakers. Foreign software developers and auto parts suppliers may also become potential partners.
The electric car maker is expanding into robotaxis, humanoid robots and flying cars, and also plans to expand its technology licensing and customization business to include robotics and other physical artificial intelligence applications.
Xpeng Motors is rumored to have set up a strategic commercialization team about six months ago to explore new technology partnerships and other business opportunities based on the experience gained from its alliance with Volkswagen. The partnership with Volkswagen began in July 2023, when the German automaker acquired a 4.99% stake in the Chinese electric vehicle maker for approximately $700 million.
The alliance covers electric vehicle platforms, software and electronic architecture. The first jointly developed model, the ID.UNYX 08 electric SUV, integrates Xpeng Automobile’s interior management system, smart driving technology and Turing artificial intelligence chip. The model will enter mass production in March 2026, only 24 months after the cooperation.
The agreement with Volkswagen provides Xpeng with an important new revenue stream, particularly from technology services, although the company still posted losses in the first and second quarters of this fiscal year. While automotive revenue was little changed in the second quarter, with auto margins falling to 12.1% from 14.3%, revenue from services and other businesses nearly doubled, boosting the segment’s margins to 75.1% from 53.6% in the year-earlier period.
After Xpeng Motors released its financial report in late August, it said its growth was mainly due to technology research and development services provided in cooperation with Volkswagen and an increase in parts sales revenue.
Xpeng Motors’ internationalization process has accelerated. Since entering the Norwegian market in 2020, its cumulative overseas sales have exceeded 100,000 vehicles. The G9L SUV, released in Beijing on Thursday, will make its international debut at next month’s Paris Motor Show. It will be the fourth model produced at Magna’s Austrian plant, following the G6, G9 and P7+.
As Xpeng expands into physical artificial intelligence, the high-margin technical services business is likely to dominate. He Xiaopeng, head of the company, said humanoid robots will eventually bring significantly higher profits than cars. Earlier this month, the universal humanoid robot IRON rolled off the assembly line of Xpeng Motors. The company plans to begin commercial delivery of the robots to China and overseas markets in 2027.
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