XPeng Plans to Sell EV and AI Technology to Foreign Automakers

Chinese electric vehicle manufacturer XPeng is planning to expand its technology business by offering its electric vehicle and artificial intelligence systems to foreign automakers beyond its existing partnership with Volkswagen.

The company has already been in contact with potential partners, and at least some have expressed interest in its technology, according to two people familiar with the matter cited by Reuters. The potential partners have not been publicly identified, and no new agreements or commercial terms have been announced.

The move would represent a broader shift in XPeng’s business model as the company seeks additional revenue from technology services rather than relying primarily on vehicle sales.

Technology XPeng Plans to Offer

XPeng plans to offer several technologies that sit at the core of modern electric and software-defined vehicles.

The proposed offerings include its electrical and electronic architecture, smart cockpit systems, Turing artificial intelligence chips and advanced driver-assistance software. Potential customers could include foreign automakers, software developers and automotive suppliers.

These technologies can form an important part of a modern vehicle’s underlying computing and software systems.

Instead of developing every component internally, an automaker could potentially use technology supplied or licensed by XPeng to accelerate development of vehicles equipped with advanced digital functions.

However, the company has not disclosed which manufacturers it is negotiating with or whether any agreements have been signed.

Volkswagen Partnership Provides a Model

XPeng’s plans build on its existing relationship with Volkswagen.

Volkswagen invested about $700 million in XPeng in 2023, acquiring approximately 4.99% of the Chinese EV manufacturer. The two companies established a strategic partnership covering electric vehicle platforms, software and electrical and electronic architecture.

The partnership has since progressed to jointly developed vehicles.

The first jointly developed model, the ID.UNYX 08, incorporates XPeng’s cockpit systems, smart-driving technology and Turing AI chips. Reuters reported that the model entered mass production in March 2026, about two years after the collaboration began.

XPeng’s experience with Volkswagen therefore provides a practical example of how its technology could be supplied to another major automaker.

Technology Services Are Growing Faster Than Vehicle Revenue

The push into technology licensing comes as XPeng’s services and other businesses have become a more significant source of revenue.

The company’s second-quarter results showed services and other-business revenue of 2.7 billion yuan, approximately $400 million, representing a 93.9% year-on-year increase. The segment’s gross margin reached 75.1%, compared with 53.6% a year earlier.

Vehicle sales revenue, by comparison, increased only 1% during the same period, while vehicle gross margin declined to 12.1% from 14.3%.

The figures help explain why XPeng is looking beyond conventional vehicle sales.

Technology services can potentially generate higher margins because software, intellectual property and technology development can be sold or licensed without requiring the company to manufacture an entire vehicle for each customer.

XPeng nevertheless remained loss-making, reporting a net loss of 1.34 billion yuan in the second quarter.

XPeng Is Expanding Beyond Electric Cars

The company is also developing businesses beyond electric vehicles.

XPeng has expanded its work into robotaxis, humanoid robots, flying cars and other applications involving what the company calls physical artificial intelligence.

Reuters reported that XPeng intends to broaden its technology licensing and customisation business into robotaxis, robotics and other physical-AI applications. The planned offering could also include operational deployment of XPeng’s robotaxis.

The strategy reflects a broader attempt by technology companies and automakers to apply AI beyond conventional software.

In this model, AI is connected to physical systems such as vehicles, robots and autonomous machines.

Humanoid Robots Are Part of the Strategy

XPeng has been investing heavily in humanoid robotics.

The company plans to begin commercial deliveries of its IRON humanoid robot in 2027. Reuters reported that the company sees robotics as another potential source of high-margin revenue.

CEO He Xiaopeng has said humanoid robots could eventually produce significantly higher margins than the company’s vehicle business.

That remains a company projection rather than an established financial result.

For now, XPeng’s automotive technology business has a more developed commercial relationship through its Volkswagen partnership.

A Shift in the Global Automotive Technology Market

XPeng’s plans also illustrate a changing relationship between Chinese and established international automakers.

For decades, foreign manufacturers transferred substantial automotive technology, manufacturing expertise and management practices into China through joint ventures and other partnerships.

Chinese automakers are now increasingly developing their own electric vehicle platforms, batteries, software, driver-assistance systems and AI technologies.

Some international automakers are consequently working with Chinese technology companies to accelerate their own EV and software development.

XPeng’s relationship with Volkswagen is one example of that change. Its plan to approach additional foreign automakers would extend the model to more potential customers.

Potential Partners Have Not Been Named

Despite reports of interest from potential customers, the identities of those companies remain undisclosed.

That means it is not yet possible to determine how many agreements XPeng could eventually secure or how much additional revenue the strategy could generate.

There are also no publicly announced financial terms for the proposed technology offerings.

The company would therefore need to convert its current discussions into formal agreements before the expansion could be measured through new contract revenue.

International Expansion Continues

The technology push is taking place alongside XPeng’s international vehicle expansion.

The company has sold more than 100,000 vehicles overseas cumulatively since entering Norway in 2020, according to Reuters.

XPeng has also been increasing its presence in European markets.

The company recently announced that it would establish a direct national sales company in the United Kingdom, taking greater control of its local operations while continuing to use International Motors for operational support.

The combination of international vehicle sales and technology licensing gives XPeng multiple ways to expand beyond its home market.

Competition Could Be a Challenge

Selling technology to foreign automakers would also expose XPeng to competition from established automotive technology suppliers and other Chinese EV companies.

Automakers have increasingly sought software, AI, battery and autonomous-driving technologies from outside suppliers.

However, automakers also face questions about cybersecurity, intellectual property, regulatory compliance and long-term dependence on external technology providers.

Any international technology agreements would therefore have to address more than price and technical performance.

What XPeng Is Trying to Build

XPeng’s latest strategy suggests that it increasingly sees itself not only as an electric vehicle manufacturer but also as a technology provider.

Its existing Volkswagen relationship has demonstrated that its software, electronic architecture and AI technologies can form part of another automaker’s vehicle-development programme.

The company now wants to explore whether that model can be extended to additional customers.

If new partnerships are completed, XPeng could generate revenue from technology licensing, research and development services, software and components without relying entirely on its own vehicle sales.

For now, however, the company remains in the early stage of that expansion.

The potential partners have not been named, commercial agreements have not been announced, and the financial contribution of the proposed deals remains uncertain.

XPeng’s next challenge will be turning interest in its technology into signed partnerships and recurring international revenue.