XPeng shops its self-driving tech to automakers — Tesla found no takers

XPeng is trying to turn its self-driving and smart-cockpit systems into a licensing business, courting automakers, suppliers, and software firms beyond its existing Volkswagen deal. The Chinese EV maker set up a "strategic commercialisation team" about six months ago to chase these deals, offering its electrical and electronic vehicle architecture, smart cockpit, in-house Turing AI chips, ADAS and autonomous-driving software, and even robotaxi and humanoid-robot work. No new customers have been named, but interested parties have made contact, including foreign software developers and auto suppliers as well as carmakers. The Volkswagen blueprint: VW put roughly US$700 million into XPeng in 2023 for a 4.99% stake, then leaned on the startup’s software and electronics for its own China-market EVs. The jointly developed ID.UNYX 08 electric SUV entered mass production in Mar 2026 running XPeng’s tech. Service revenue jumped 93.9% year-over-year to about US$400 million in the second quarter of 2026. That’s the high-margin, non-hardware income this whole licensing push is built to scale, and it’s a big reason the stock ticked up around 3% on the report. XPEV is still down about 47% year-to-date.

XPeng’s approach to self-driving actually rhymes with Tesla’s. When we interviewed XPeng’s head of AI earlier this year, Dr. Xianming Liu described the same core philosophy: scale up the data, train end-to-end neural networks, and let the car drive on cameras. XPeng didn’t gut the sensor suite to get there. Where Tesla deleted radar and ultrasonics in pursuit of pure vision, XPeng keeps them as a separate, redundant safety layer that runs independently of the main driving AI. “We do utilize these other sensors, but they are utilized for the active safety system, which requires an orthogonal system to be totally redundant with the main driving system,” Liu told us. Those sensors power automatic emergency braking and steering as a backstop, even though cameras do the actual driving. It’s the same vision-led bet Tesla made, with a hardware safety net Tesla threw out.

The article also notes that Tesla has wanted to license its self-driving stack for years but hasn’t landed a single deal. Musk floated “preliminary discussions” with other carmakers in 2021, said Tesla was “happy to license” its tech after a 2023 charging deal with Ford, and claimed in Apr 2024 that Tesla was “in talks with one major automaker” about FSD. None of it produced a signed licensing deal. Then, last Nov, Musk admitted the automakers simply don’t want it. “I’ve tried to warn them and even offered to license Tesla FSD, but they don’t want it! Crazy…” he wrote on X. Ford CEO Jim Farley had already said the quiet part out loud, telling the public that “Waymo is better.” Part of the standoff is liability: legacy automakers reportedly wanted Tesla to eat the risk when a licensed system crashes, and Musk called those terms unworkable.

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