Volkswagen, which has partnered with XPeng in 2023 to jointly develop vehicles for the Chinese market, will be integrating the brand’s autonomous driving (AD) software starting in 2026.
The information was first reported by CarNewsChina on Monday, citing sources within the company.
The report said the first model to feature the AD software will be a mid-size SUV and that VW is already testing XPeng‘s XNGP on the upcoming EV, with mass production set to start in 2026.
The XNGP is the brand’s most advanced ADAS system, but it is currently only available in China. The launch in Europe is expected by the end of 2026.
A more limited version of the ADAS, XPeng‘s ‘XPilot Assist,’ designed for highway assist and lane keeping, was first launched in late 2022.
The system was fully deployed across China in 2023.
Volkswagen aims to gradually equip its vehicles in China with the software, if the testing is successful.
The German automaker is switching to XPeng‘s software, after the autonomous driving development was first assigned to its software unit, Cariad, in China.
VW has invested about €12 billion in its subsidiary Cariad to develop automotive software.
After internal bureaucratic struggles, the company has shifted from full in-house software development to partnerships with software-focused brands.
This change came under Volkswagen Group‘s direction of Oliver Blume, who succeeded Herbert Diess in 2022.
In 2023, Volkswagen partnered with Chinese EV maker XPeng, which started with the joint development of two mid-size fully electric models for the Chinese market.
The German automaker invested about $700 million in a 4.99% stake in XPeng, a purchase that was completed by year end.
Ralf Brandstätter, a member of the Volkswagen AG Board of Management for China, said in July 2024 that all EVs of the VW brand in China would be equipped with XPeng‘s “very powerful and efficient architecture” in 2026.
The collaboration was later strengthened to build a super-fast charging network in the country.
In mid-August, the two brands further extended the partnership to include the development of hybrid and internal combustion engine (ICE) models.
XPeng‘s founder and CEO He Xiaopeng has told Financial Times earlier this year that VW’s investment has allowed it to become the first Chinese carmaker “to launch autopilot functions for expressways and a fully voice-controlled smart cabin system.”
By then, the chief executive had already hinted that the chip would be integrated in Volkswagen‘s vehicles, while saying that the company was “looking for long-term partners” besides the German automaker.
Rivian and Volkswagen started collaborating late last year. The German automaker agreed to invest $5.8 billion in the EV maker as it adopts Rivian‘s zonal architecture and software stack in its future electric vehicles.
However, and as reported earlier last month, the two companies have been facing setbacks in their joint venture, as difficulties in adapting the EV maker’s software to VW models have been delaying the progress on upcoming electric vehicles.
Over the weekend, German media outlet Golem reported that Cariad is now primarily focused on coordinating Volkswagen‘s joint ventures with XPeng and Rivian, rather than jointly developing the software itself.
The company will continue to develop key core technologies internally, ensuring that essential software competencies remain in-house.
