How Does XPeng Company Work?

XPeng designs, develops, manufactures, and markets smart electric vehicles. Its product range caters to a broad spectrum of consumers, from compact sedans to multi-purpose vehicles.

The company's value proposition is built on deep integration of AI into its intelligent cockpits and smart driving systems. This includes proprietary AI-powered operating systems and self-developed chips.

XPeng emphasizes in-house development of its full-stack advanced driver-assistance system (ADAS), known as XNGP. This includes its intelligent operating system and core vehicle systems like the powertrain.

Manufacturing processes are being accelerated, with the MONA M03 achieving a production of 50,000 units in just four months. The factory can produce one MONA M03 every 72 seconds.

In 2024, XPeng expanded its reach into key international markets, including the UK, Australia, and the UAE, marking a significant step in its global strategy. The delivery of its 10,000th vehicle in Europe further solidified its presence. New vehicle launches, such as the MONA M03 and the X9 MPV, have been instrumental in driving sales, with the MONA M03 alone seeing over 15,000 units delivered by December 2024 and reaching 50,000 units produced in just four months. The G6 model also emerged as a top seller in overseas markets during 2024.

A cornerstone of XPeng's recent strategy is its deepening collaboration with the Volkswagen Group. This partnership, initiated with a substantial US$700 million investment from Volkswagen in early 2024, focuses on the joint development of advanced E/E architecture for Volkswagen's electric vehicles in China, with the first models slated for release by 2026. This alliance also encompasses the co-development of an extensive super-fast charging network, projected to include over 20,000 charging piles across 420 cities by January 2025.

XPeng has navigated the intense price competition within the Chinese EV market by prioritizing cost reduction initiatives and leveraging increased sales volumes to achieve greater economies of scale. This focus on operational efficiency is key to maintaining profitability and market share.

The company's competitive edge is significantly bolstered by its technological leadership, particularly in full-stack advanced driver-assistance systems (ADAS), exemplified by its XNGP capabilities. XPeng's commitment to continuous innovation is also evident in its rapid over-the-air (OTA) updates, with OTA 5.4 released in January 2025, and plans to launch a new or facelifted model approximately every quarter in 2025. The introduction of its in-house developed Turing AI chip in 2024 further enhances its autonomous driving technology. This dedication to technological advancement aligns with the core principles outlined in Mission, Vision & Core Values of XPeng.

XPeng is a key competitor in the smart EV sector, especially within China. In the first half of 2025, it was the only Chinese NEV startup to achieve over 50% of its annual sales target, selling 197,189 units. In Europe, it led Chinese premium brands with 8,338 registrations in the same period, largely due to the popularity of its G6 model.

The company faces intense competition and a price war in the Chinese EV market, impacting profitability. Despite reduced net losses in Q1 2025 to RMB 0.66 billion (US$91.4 million), analysts project continued net losses for 2025 and 2026. Other risks include fierce competition from established and new EV manufacturers, regulatory shifts, supply chain vulnerabilities, and evolving consumer preferences.

XPeng's strategy centers on innovation and global expansion, with plans for new or updated models quarterly in 2025. A major focus is the international rollout of its AI-powered intelligent driving systems, aiming for global usability of Highway NGP starting in 2024 and full XNGP functionality by 2025, with user introductions in global markets by 2026.

The company is investing RMB 3.5 billion (US$490 million) annually in AI technology for smart driving, supported by over 3,000 employees. XPeng plans to double its overseas sales and service points to over 300 and commence overseas production later in 2025. The company aims to become a leading global AI car company within a decade, with a long-term goal of 50% of sales originating from international markets by 2033.