Xpeng plans to expand its technology business beyond Volkswagen and offer more of its software and hardware solutions to foreign automakers, according to a Reuters report published Thursday. The company is seeking additional revenue streams as vehicle margins come under pressure and it continues investing in artificial intelligence research and development. Some potential partners have already shown interest, and Xpeng has contacted several of them, the report said.
The technology package Xpeng is reportedly prepared to offer includes its electrical and electronic architecture, smart cockpit systems, Turing AI chips and advanced driver-assistance software. The company is also understood to be targeting foreign software developers and automotive suppliers. However, the sources cited in the report did not identify the potential partners, and it was not disclosed whether any new agreements have been signed or what commercial terms may apply.
The report also said Xpeng is considering expanding its technology licensing and customization business into robotaxis, humanoid robots and other physical AI applications. That could include the operational deployment of Xpeng’s robotaxis. To support these efforts, the company set up a strategic commercialization team about six months ago to explore new partnerships and business opportunities.
The push comes as services and other businesses are becoming a more important part of Xpeng’s revenue mix. In its second-quarter earnings report released on August 24, the company said revenue from services and other businesses rose 93.9% year over year to 2.7 billion yuan, or about $400 million. Gross margin in that segment improved to 75.1% from 53.6% a year earlier. By comparison, vehicle sales revenue increased just 1.0%, while vehicle margin declined to 12.1% from 14.3%. Xpeng still reported a net loss of 1.34 billion yuan.
Xpeng’s partnership with Volkswagen began in July 2023, when the German automaker announced an investment of about $700 million for an approximately 4.99% stake in the company. The alliance covers electric vehicle platforms, software and electrical and electronic architecture. Xpeng has said Volkswagen will be the first commercial customer for VLA 2.0, and the jointly developed ID. UNYX 08 went on sale in China in April.
As Xpeng broadens its focus into physical AI, chairman and CEO He Xiaopeng has said humanoid robots could ultimately deliver much higher margins than the vehicle business.
Source: CnEVPost
