XPeng, still a fairly young car company from China, signed a major deal to share its newest smart driving technology with Volkswagen Group. This is the first time a traditional top-tier carmaker has bought core AI software from a Chinese startup to use on a global scale.
The technology at the center of this deal is called VLA 2.0. The Vision-Language-Action is a second-generation AI system that helps EVs “see” and “understand” the world as a person does. It does not need any digital maps to work. Instead, it can navigate tight streets and even school campuses on its own. It even adapts to different driving habits in different countries. XPeng CEO He Xiaopeng says the software is almost like having a “Level 4” self-driving car, which means the car can handle most driving tasks without help.
Volkswagen is XPeng’s first customer for the VLA 2.0
XPeng has huge plans for the next few years. The company wants to sell 1 million electric cars in overseas markets by the year 2030, with more than 70% of its profits to come from outside of China by that time. Last year, XPeng sold 429,445 vehicles – more than double what it sold the year before. Only 45,008 of those were sold outside of China in 2025, but the company expects that number to double again in 2026.
To support this growth, XPeng is opening hundreds of new stores. By the end of this year, it plans to have 680 sales locations worldwide. The company is focusing most of its energy on five specific countries: Germany, Norway, France, Thailand, and Israel. It is also hiring 8,000 new workers this year to keep up with all the new projects.
XPeng uses in-house developed AI chips – source: XPeng
One of those projects is the XPeng P7+ sedan (full review right here). This car is already being built in Austria and will soon be sold in 25 different European countries. Eventually, XPeng wants to sell its EVs in more than 60 countries. In early 2026, the company plans to launch three new models that use extended-range technology. One of those EVs is the new XPeng X9 PowerX, which we reviewed recently.
But electric cars aren’t enough for XPeng and Mr. He has a vision for the year 2026 that sounds like a science fiction movie. He wants to start mass-producing humanoid robots, flying cars, and robotaxis all in the same year. The new robot, named “Iron,” is expected to go into mass production by the end of 2026. Meanwhile, the Land Aircraft Carrier is already being tested on a pilot production line.
XPeng autonomous taxis are coming this year – source: XPeng
Robotaxis are another big part of the plan. XPeng is starting small trials for these taxis this year and expects the business to grow very quickly between 2027 and 2028. The goal is to make a car so smart that a passenger can simply say, “Take me to the nearest coffee shop,” and the car will find the best path while avoiding traffic lights and narrow roads.
Some people might find the idea of a flying car or a robot driver a bit strange, but Volkswagen clearly sees the value. By using Xpeng’s AI, Volkswagen can make its own EVs smarter and more competitive. For XPeng, having a big partner like Volkswagen proves that its technology is some of the best in the world. As the “DeepSeek moment” for autonomous driving begins, these two companies are betting that AI will be the most important part of any car you buy in the future.
Via