XPeng secured Volkswagen as the first commercial customer for its second-generation Vision-Language-Action (VLA 2.0) autonomous driving solution, marking the first time a major Western carmaker adopts a China-developed AD software.
The update was shared by the Guangzhou-based automaker’s founder and CEO, He Xiaopeng, via an internal memo on Tuesday — as first reported by the Chinese media outlet CnEVPost.
VLA 2.0 is XPeng‘s large-scale end-to-end model, which supports Level 4 autonomous driving (AV), aimed to deliver quicker reactions, better data processing, and “more human-like driving performance across complex real-world scenarios”, as stated by the company.
Xiaopeng described Volkswagen‘s choice as a pivotal moment for Chinese AI.
“For a leading global automaker to choose China’s AI technology carries meaning far beyond the cooperation itself,” the Chief Executive wrote.
“It validates one essential point: we are not only leading in products but, at the core technology level, we now possess globally competitive capabilities that are scalable and generizable,” he added.
In the internal memo, Xiaopeng stated that he “extensively tested VLA 2.0” during the Chinese New Year holiday and experienced “smooth operations and precise predictions in complex road conditions”.
The CEO added that he believes fully autonomous driving has reached an “inflection point”, saying that the industry is now experiencing its “DeepSeek moment” — a turning point that signals rapid acceleration and broader adoption.
XPeng and VW Parternship
The outlet said Volkswagen‘s adoption of XPeng‘s VLA 2.0 marks an expansion of their partnership into AI-driven software development.
The companies’ strategic collaboration started in July 2023 with a $700 million investment from the German automaker to acquire a 4.99% stake in the Chinese brand, and with plans to jointly develop two EVs.
Throughout 2024, both firms signed an Agreement on platform and software collaboration, and later began to cooperate on a joint electrical/electronic (E/E) architecture — known as the China Electronic Architecture (CEA) — expanding it last year.
Volkswagen‘s announcement that the E/E architecture would be included in all Chinese-produced models based on its global, German-made Modular Electric Drive (MEB) platform hinted at the inclusion of not only fully electric vehicles, but also hybrid and internal combustion engine (ICE) models.
However, the specific collaboration was reported earlier this month to have ended last year.
In January 2025, XPeng and Volkswagen Group China signed a Memorandum of Understanding (MOU) to jointly build more than 20,000 chargers, forming “one of the largest super-fast charging networks in China”.
VLA 2.0 Updates
During the Informal Working Group on Automated Driving Systems (IWG on ADS) session in Shanghai earlier this month, XPeng shared updates about its VLA 2.0.
The company is planning to roll out the VLA 2.0 for its upcoming models from March onward, including its robotaxi, whose roadmap is expanding in its home market and which is set to begin production later this year.
The Chinese automaker announced last month that its VLA 2.0-equipped models had already “completed third-party closed-course testing” and would “soon” start public road trials.
The report added that the robotaxis service is planned to launch pilot operations for ride-hailing models this year, with rapid growth anticipated between 2027 and 2028.
Earlier this month, XPeng combined its AV and intelligent cockpit teams into a single “General Intelligence Center,” allowing both driving functions and in-car human-machine interaction systems to be powered by shared AI foundation models.
During the forum, the automaker also showcased its AI-driven Advanced Driver Assistance System (ADAS) — ‘XNGP’ (Navigation Guided Pilot) — to global UN delegates and other experts from major automotive markets.
Future Plans
After publicly announcing last year’s overseas sales — 45,008 vehicles —, XPeng stated in an internal meeting last month, first reported by the local media outlet 36Kr, that it aims for its exports to double in 2026.
The company is targeting 1 million overseas sales by 2030 and expects those markets to generate over 70% of profits, according to the internal memo.
XPeng also aims to double its global showroom network to 680 stores this year, focusing on deepening its presence in Israel, Germany, Norway, Thailand, and France.
Last year, the brand expanded its global presence to 60 markets, meeting its 2025 target.
Additionally, the memo stated XPeng will expand its global workforce by 8,000 in 2026, with 5,000 positions filled through campus recruitment.
